U.S. Crude-Oil Stocks Rise for First Time in Seven WeeksMoming Zhou
U.S. crude inventories increased last week for the first time since June as refineries reduced operations and the end of the peak summer driving season approaches.
Stockpiles grew 1.4 million barrels in the week ended Aug. 8, rebounding from a five-month low, the Energy Information Administration reported today. Refineries reduced utilization rates for a third time, according to the Energy Department’s statistical arm.
Crude inventories may continue to pick up as plants prepare for seasonal maintenance and rising output from shale formations bolsters U.S. production. Fuel consumption reached the highest this year in the four weeks ended Aug. 8, EIA data showed. The peak driving season typically starts on Memorial Day, which came on May 26 this year, and runs through Labor Day on Sept. 1.
“We are going into the fall and the peak demand season is nearing an end,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Maintenance usually leads you to a crude inventory build, which will pressure crude prices.”
Crude inventories unexpectedly increased to 367 million barrels last week, the EIA said. Analysts surveyed by Bloomberg had expected a decline of 2.05 million barrels.
Supplies at Cushing, Oklahoma, the delivery point for WTI futures, increased for a second week, gaining 418,000 barrels to 18.4 million. CVR Energy Inc. shut the Coffeyville refinery in Kansas after a July 29 fire. The 115,000-barrel-a-day plant receives crude from Cushing.
U.S. domestic crude production reached a 27-year high in July as a combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies trapped in shale formations. Output will rise to 9.28 million barrels a day in 2015, the highest annual average since 1972, according to EIA forecasts.
Refineries used 16.2 million barrels a day of crude last week, down 179,000 from the previous period and the lowest level since June 20. The utilization rate dropped to 91.6 percent from 92.4 percent.
U.S. refineries typically schedule maintenance for September and October, when they move from maximizing gasoline output to producing winter fuels.
The four-week average oil consumption rose to 19.8 million barrels a day in the period ended Aug. 8, the highest since Dec. 20, EIA data showed.