U.S. crude stocks surged unexpectedly last week to their highest level on record for December, as imports jumped and refineries maintained output, government data showed on Wednesday.
Continue Reading Below
Crude inventories rose by 7.3 million barrels in the last week, according to Energy Information Administration data, surprising analysts who had expected a decrease of 2.3 million barrels. U.S. crude imports rose last week by 1.174 million barrels per day.
The surprising build added to concerns about a growing global glut of crude, since it came at a time of year when inventories normally decline due to a pick-up in winter fuel demand and efforts to reduce annual tax bills by dumping stocks.
"It's a very bearish report and plays into the mantra of supply glut and it will be interesting to see if the price can test the lows in the $53 area as the year comes to a close," said Phil Flynn, analyst at Price Futures Group in Chicago.
After data, U.S. crude oil futures extended losses slightly, down more than $2 a barrel to just above $55 a barrel in extremely thin pre-holiday volume.
At 387 million barrels, nationwide crude oil stocks were the highest for this time of year in records going back to 1982. The surplus compared to last year has grown for several weeks, and stocks are now some 5 percent higher than in 2012 and 2013.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 973,000 barrels, EIA said.
Refinery crude runs inched up by 40,000 barrels per day, EIA data showed. Refinery utilization rates remained unchanged.
Distillate stockpiles, which include diesel and heating oil, rose 2.3 million barrels, versus expectations for a 900,000 barrels drop, the data showed. Stocks are rising quickly in the Gulf Coast PADD 3 region, building by 1.6 million barrels to 44.3 million last week, their highest for this time of year since 2010, data showed.
Gasoline stocks rose by 4.1 million barrels, compared with analysts' expectations in a Reuters poll for a 600,000 barrels gain.
(Reporting by Jonathan Leff in New York; Editing by David Gregorio)