U.S. crude oil stockpiles rose sharply last week and gasoline inventories fell the most on record as refineries continued to be hampered by damage from Hurricane Harvey, the Energy Information Administration said on Wednesday.
Refineries operated at the lowest level in nine years after Harvey, which hit the Gulf Coast on Aug. 25, shuttered plants on the Texas Coast as well as oil production operations and ports.
Crude oil production that was shuttered in the wake of Harvey have began to return to service, with output rising to 9.4 million barrels per day in the week to Sept. 8 from 8.8 million bpd a week earlier. At the same time, refinery runs continued to decline due to shut-ins in the wake of the storm.
Crude inventories rose 5.9 million barrels, compared with analysts’ expectations for an increase of 3.2 million barrels.
“Impact of the 2017 Atlantic Hurricane season continues to be seen in today’s report with a build observed in the commercial crude stockpile and drawdowns in refined products,” said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London. “The focus now shifts to the post-Harvey scenario,” he said.
U.S. crude traded up 70 cents a barrel or 1.47 percent, by 11:13 a.m. EDT (1514 GMT). Benchmark Brent crude rose 53 cents a barrel or nearly 1 percent, to trade at $54.80.
“The market seems to be recognizing that this is a hurricane-altered report, and is waiting to see once we get through this hurricane period,” said Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut.
Refinery utilization rates fell by 2 percentage points to 77.7 percent, the lowest rate since 2008, as crude runs fell 394,000 bpd, EIA data showed.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose by 1 million barrels, EIA said.
Gasoline stocks fell 8.4 million barrels, the largest draw on record, compared with analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell 3.2 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed.
U.S. crude imports fell last week by 1.2 million bpd to 5.7 million bpd, the lowest on record. U.S. crude exports fell to 6.5 million bpd, the lowest since 2014, when crude export restrictions were first relaxed.