Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Oklahoma, U.S. April 21, 2020.
Crude oil stocks increased by 1.3 million barrels to 443.2 million barrels for the week ending May 16, against analysts’ predictions of a 1.3 million-barrel drop. Crude inventories at Cushing, Oklahoma, fell by 457,000 barrels. Net crude imports rose by 110,000 barrels per day to 2.58 million bpd, a six-week high.
Phil Flynn, senior analyst at Price Futures Group, said: “The increase in crude supplies was disappointing based off expectations, and we didn’t see the drawdown in gasoline inventories that we thought we were going to see.”
Gasoline stocks grew by 816,000 barrels to 225.5 million barrels, despite expectations of a 520,000-barrel decline. Gasoline demand dropped to 8.6 million bpd from 8.8 million bpd. UBS analyst Giovanni Staunovo stated: “Implied oil demand rose only modestly versus last week, not supporting renewed product draws.” He added: “Demand for oil products should rise over the coming weeks, with the start of the driving season.”
Distillate inventories, including diesel and heating oil, increased by 580,000 barrels to 104.1 million barrels, against forecasts for a 1.4 million-barrel decrease. The four-week average distillate demand fell to 3.6 million bpd, the lowest since April 2024. Refinery runs rose by 89,000 bpd, with utilization rates up 0.5 points to 90.7%.
Staunovo noted: “The report saw builds for crude, gasoline, and distillate, which market participants did not like.” Consequently, U.S. gasoline and heating oil futures turned negative after the report.
