Crude oil inventories unexpectedly rose by 3.3 million barrels in the June 2 week to 513.2 million, 2.3 percent above the level a year ago. The weekly increase broke an eight-week long string of drawdowns and stunned the market, as analysts expected another sizeable drawdown of around 3.5 million barrels. Product inventories also rose quite sharply in the week, with gasoline up 3.3 million barrels to 240.3 million, 0.3 percent below last year at this time, while distillates rose 4.4 million barrels to 151.1 million, down 0.2 percent from the year ago level. WTI crude oil prices plunged about $1.70 to around $46.00 per barrel immediately following the release of the EIA report.
Crude oil imports rose in the week, averaging 8.3 million barrels per day, up 356,000 barrels per day from the prior week. Imports over the last 4 weeks averaged 8.3 million barrels per day, 8.8 percent above the same period last year and up from the 6.6 percent year-on-year gain seen in the prior week.
But refineries cut back utilization of their operable capacity by 0.9 percentage points to 94.1 percent, with production declining by 0.5 million barrels per day to 9.9 million barrels per day for gasoline, while gasoline production slightly increased to an average of 5.3 million barrels per day.
Product demand declined, as total product supplied over the last 4 weeks averaged 20.1 million barrels per day, down from the 20.4 million barrels per day 4-week average reported last week. Of this amount, motor gasoline supplied averaged 9.6 million barrels per day, down 0.7 percent from the year ago level, while distillate fuel supplied fell to an average of 4.0 million barrels barrels per day, up 1.8 percent from the same period last year.
Declining demand and refinery production coupled with increased crude imports and domestic crude oil production point to higher inventory levels and further downward pressure on oil prices ahead.