US crude oil inventories rose last week for the first time in three weeks while stockpiles of distillates, which provide the diesel for trucks, buses and trains and fuel for jets, climbed a second week in a row, data from the Energy Information Administration (EIA) showed Wednesday.
The increases raised questions about energy demand in the world's largest oil consuming country amid pump prices of fuel hovering near record highs, industry analysts said.
"It's a net bearish report on the week by the EIA, considering the build in crude inventories and the soft demand for products, especially distillates," John Kilduff, partner at New York energy hedge Again Capital, said.
Crude inventories climbed by 2.421 million barrels during the week ended April 1, the EIA reported in its Weekly Petroleum Status Report, compared with the average draw of 2.056 million barrels forecast by analysts polled by US media.
Distillate stockpiles, which include diesel and heating oil, rose by 771,000 barrels in the week against expectations for a draw of 0.819 million barrels, the EIA data showed. Prior to the past two weeks, distillates had been the strongest growth component of the US oil complex for months, seeing virtually non-stop inventory declines since early January.
Inventories of gasoline were among the bullish data reported by the EIA for last week, with the agency citing a draw of 2.04 million barrels versus forecasts for a build of 63,000 barrels. Automobile fuel gasoline, also known as petrol outside the United States, is America's most-consumed oil product.
Exports of US crude also rose last week, touching 3.69 million barrels versus the previous week's 2.99 million, as American oil found more buyers abroad amid the tightness in global energy supply from the sanctions imposed on Russia over its military operation in Ukraine.
Aside from the gasoline stockpile slide and rise in exports, the EIA data for last week was overwhelmingly bearish. That included a 1.7-million-barrel build at the Cushing, Oklahoma hub, which acts as delivery point for the West Texas Intermediate (WTI) crude that is used as a pricing benchmark for US oil.
WTI rose to $130 while the price of global crude benchmark Brent, which is traded in London, surged to almost $140 two weeks after the start of the Russian operation in Ukraine. Consequently, pump prices of US gasoline hit record highs of above $4.35 per gallon.
Both WTI and Brent have come off their highs since, with the US benchmark slipping to below $100 a barrel in recent days, after the Biden administration said it will release 180 million barrels of crude from the US emergency oil reserve over the next six months to alleviate short supplies at home. Last week alone, some 3.7 million barrels were released from the US Strategic Petroleum Reserve, keeping up with the weekly issuance of about 3 million barrels from there.
Separately, on Wednesday, the Paris-based International Energy Agency, which represents mostly Western energy consumers, said it will release 120 million barrels from the reserve of its members, with the United States contributing half of that.
The combined drop in WTI and Brent pricing and the reserves releases have so far done little in bringing down US pump prices of gasoline, which hovered on Wednesday at above $4.16 per gallon. Industry experts say the gasoline pump price, which was about $1.50 higher than a year ago, could spark demand destruction in oil amid inflation at 40-year highs. (ANI/Sputnik)
( With inputs from ANI )
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