U.S. crude stocks rose unexpectedly last week as imports jumped and production increased to another weekly record, the Energy Information Administration (EIA) said April 11.
Crude inventories rose by 3.3 million barrels (bbl) in the week ended April 6, compared with analysts' expectations for a decrease of 189,000 bbl.
Net U.S. crude imports rose last week by 1.7 million bbl/d to 8.65 million bbl/d. However, the overall four-week average of U.S. imports has remained relatively stable from the same period a year ago.
Weekly production topped 10.5 million bbl/d for the first time, the EIA said, though the weekly figures are notoriously volatile. EIA monthly figures for December and January put production sharply lower than the weekly estimates.
Refinery crude runs rose by 83,000 bbl/d, EIA data showed. Refinery utilization rates rose by 0.5 percentage points, bringing overall capacity utilization to 93.5% for the nation's refiners, the highest level seasonally since 2005.
"It’s shoulder season, and we’re running through more crude oil in the refineries and the demand for product is also at an all time record," said Bob Yawger, director of energy futures at Mizuho.
Crude prices dropped immediately after the report, then rebounded as market players focused on escalating tensions in Syria, after President Donald Trump threatened a missile attack following a chemical weapons attack there this week.
Analysts also linked the rally to news of loud blasts in Saudi Arabia's capital Riyadh. Yemen's Houthi forces, who control most of northern Yemen, launched missile attacks on the Saudi defense ministry, Houthi-controlled Al Masirah TV said. Saudi state media said defense forces intercepted a missile over the capital.
U.S. crude rose to its highest level since December 2014. West Texas Intermediate crude rose 2.4%, or $1.54/bbl, to $67.06, on heavy volume, while Brent crude gained 2.1% to $72.56/bbl as of 10:24 a.m. CST (15:24 GMT).
Crude stocks at the Cushing, Okla., delivery hub rose by 1.1 million bbl, the EIA said.
Gasoline stocks rose by 458,000 bbl, compared with analysts' expectations in a Reuters poll for a 1.4 million bbl drop. Gasoline futures turned negative after the news.
Distillate stockpiles, which include diesel and heating oil, fell by 1 million bbl, vs. expectations for a fall of 29,000 bbl.