Weekly crude stock build surprises with 2.969 million barrel increase

• Crude oil inventories climbed by 2.969 million barrels, against expectations for a 0.641-million-barrel decline. The previous week’s draw stood at 0.640 million barrels.
• Stocks at the Cushing hub increased by 2.266 million barrels, after a drop of 0.342 million barrels the week before.
• Gasoline inventories fell by 1.686 million barrels, while a build of 0.093 million had been forecast. In the prior week, they had risen by 0.794 million barrels.
• Distillate supplies dropped by 0.428 million barrels, versus a predicted decline of 0.633 million barrels. The preceding week recorded a gain of 1.585 million barrels.

The crude-oil build dominates the report. Market participants had anticipated a slight decline, yet inventories expanded by close to 3 million barrels, representing a roughly 3.6-million-barrel reversal of expectations. The Cushing, Oklahoma, storage location also posted a large increase.

Gasoline data present a contrasting picture. Stockpiles of the fuel dropped even though a slight build had been projected. Distillates also moved lower, though their decline was marginally less than predicted. Taken together, the four numbers point to a mixed weekly report, with the crude and Cushing increases being the most unambiguous bearish developments for oil.

Privately compiled numbers released late yesterday showed the following changes.

Rapid assessment: The crude-stock increase might pressure oil prices, whereas the gasoline draw, which was bigger than anticipated, could provide some counterbalance. Cushing is relevant because it serves as the delivery hub for West Texas Intermediate crude futures. By themselves, the numbers do not determine the reasons behind the inventory movements or oil’s price response.

What the report covers: The U.S. Energy Information Administration’s Weekly Petroleum Status Report monitors weekly shifts in domestic crude and product stockpiles. Market participants compare the changes with forecasts for insights into supply-demand dynamics; these weekly statistics are subject to volatility.