US crude stocks post biggest weekly rise in 3.5 years, EIA says

• Crude stocks rose to their highest level since June 5, with the Cushing, Oklahoma hub gaining 1.6 million barrels
• Net U.S. crude imports jumped by 1.77 million barrels per day, contributing to the unexpected inventory build
• Both U.S. and Brent crude futures extended losses following the report, while gasoline stocks fell less than expected by 1 million barrels

US Crude Stocks Post Largest Weekly Gain Since January 2023

Summary

U.S. crude inventories excluding Strategic Petroleum Reserve barrels surged by 17.4 million barrels to 424.4 million barrels in the week ending August 7, marking the largest weekly increase in 3.5 years, according to the Energy Information Administration (EIA). This dramatic build significantly exceeded analyst expectations of a 1.4 million-barrel draw and represents the highest inventory level since June 5.

Key Drivers:

The substantial inventory build was primarily attributed to slumping crude exports, while net U.S. crude imports rose by 1.77 million barrels per day. Cushing, Oklahoma storage hub saw a 1.6 million-barrel increase.

Market Reaction:

Both U.S. and Brent crude futures extended losses following the report, as the surprise inventory build signals weaker demand or supply oversupply.

Refining Activity:

• Refinery crude runs increased by 26,000 barrels per day
• Refinery utilization rates declined 0.3 percentage points to 96.2%

Petroleum Products:

Gasoline stocks fell by 1 million barrels to 208.7 million barrels, slightly below the expected 1.2 million-barrel draw. U.S. gasoline futures dropped 0.63% on the smaller-than-anticipated drawdown.

Distillate stockpiles, including diesel and heating oil, decreased by only 10,000 barrels to 107.1 million barrels, well below the 1.3 million-barrel drop forecasted. Despite this, U.S. diesel futures reversed losses and rose 0.54%.

Implications:

The substantial crude build suggests potential weakness in export demand or refining activity, which could pressure oil prices in the near term despite relatively strong refinery utilization rates above 96%.