Crude, gasoline stockpiles rise; crude prices fall

Oil stockpiles in the United States surged by 3.3 million barrels in the week ended June 2, the EIA said Wednesday, confounding analysts' estimates for a 3.5 million-barrel decline.

Crude stocks in the United States grew 3.3 million barrels to 513 million barrels, according to the U.S. Energy Information Administration (EIA).

Qatar is the world's largest producer of liquefied natural gas, but one of the smallest members of the Organization of the Petroleum Exporting Countries, which on May 25 agreed with 11 of its rivals to extend an oil supply cut of 1.8 million barrels per day into 2018 to try to drain a multi-billion barrel global overhang of unused crude.

USA stockpiles of crude oil and gasoline rose last week, reversing recent declines and weighing on oil prices.

US crude futures tumbled 5 percent, or $2.47 a barrel, to $45.72 a barrel, the lowest settlement for USA crude since May 4.

In parallel, gasoline inventories jumped by 3.3m barrels (consensus: 0.6m), while those of distillates did so by 4.4m barrels.

The report also showed a decline in gasoline demand, despite the onset of the summer driving season following the Memorial Day holiday. Global benchmark Brent crude fell 4 percent to $48.11 a barrel - its lowest level since May 5.

OPEC and other producers including Russian Federation have pledged to cut about 1.8 million barrels per day (bpd) to help reduce global inventories.

Middle East tensions, however, have eased over the past few days, as Kuwait oil minister Essam al-Marzouq quelled fears about a potential disruption to the Opec led deal, insisting that Qatar was committed to the Opec agreement to restrict supply.

The EIA revised down its outlook for prices in 2018 on Tuesday, raising the prospect that US drillers might have to live with thinner profit margins next year. Exports dropped to 557K bpd from the previous week's 1.3M bpd, whereas crude imports advanced 1.1M bpd.

Crude stocks at the Cushing, Okla., delivery hub fell by 1.4 million bbl, the EIA said.

The EIA data also showed an increase in imports and a drop in exports. The refinery utilisation rate dropped 0.9% to 94.1%.

  • Zachary Reyes