Crude inventories rose by 15 million barrels in the week to April 17 to 518.6 million barrels, putting them within striking distance of an all-time record of 535 million barrels set in 2017.
Inventories are expected to keep rising, due to weak overall demand and an aggressive response by refiners to cut processing.
“If storage continues to increase at the end of the day, which seems likely considering all these Saudi barrels knocking at the door, then we are going to get to maximum storage sometime in the not so distant future,” said Bob Yawger, director of futures at Mizuho in New York.
U.S. crude production is falling – sliding 100,000 barrels per day last week to 12.2 million bpd – but it is not fast enough to offset the inventory glut, and it is likely to be weeks before demand rebounds enough to start to reduce stocks as well.
Oil prices were higher on the day. U.S. crude rose 30% to $14.99 a barrel as of 11:01 a.m. ET (1501 GMT), while Brent gained 6.5% to $20.56 a barrel.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose 4.8 million barrels last week to 59.7 million barrels. The main U.S. storage hub only has enough capacity for roughly 76 million barrels, and much of what is left unfilled has already been leased, according to traders.
Refinery utilization rates fell by 1.5 percentage points to 67.6% of total capacity, their lowest since 2008, and less than 1 percentage point away from its all-time low.
Product supplied by refiners – a rough proxy for U.S. fuel demand – rebounded very modestly, but is still down 25% over the past four weeks.
“Even though gasoline demand was horrible, it was up week-over-week. The other thing was that the gasoline inventories came in not as high as expected. Based off of that, it wasn’t the disaster that the market had been expecting,” said Phil Flynn, senior market analyst at Price Futures Group.
U.S. gasoline stocks rose by 1 million barrels in the week to a record high at 263.2 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 3.6 million-barrel rise.
Distillate stockpiles , which include diesel and heating oil, rose by 7.9 million barrels in the week to 136.9 million barrels, versus expectations for a 2.8 million-barrel rise, the EIA data showed.