US Oil, Fuel Stockpiles See Big Weekly Build, Suggesting Slack in Demand - Energy Agency

WASHINGTON (Sputnik) - US crude oil and fuel stockpiles rose sharply together last week for the first time in months, the Energy Information Administration (EIA) reported on Wednesday, signaling a slack in summer demand in what is typically the busiest time of the year for energy consumption.

Crude inventories were up 3.254 million barrels during the week that ended on July 8 versus the drop of 154,000 barrels forecast by analysts and against the 8.235 million barrels reported for the week that ended on July 1, EIA said in its Weekly Petroleum Status Report.

It was the second week in a row that crude inventories had shown a build, after the previous week’s rise of 8.235 million barrels.

The EIA also reported that the Biden administration released almost 7 million barrels from the US Strategic Petroleum Reserve (SPR), or emergency oil reserve, last week to add to a market perceived to be in short supply of crude. The move is part of the Biden administration's one-million-barrels per day of SPR release scheduled between May and October.

Stockpiles of gasoline, the main automobile fuel, rose by 5.825 million barrels last week, versus the forecast decline of 357,000 barrels and the previous week’s drop of 2.497 million.

Historical EIA data showed the last time gasoline inventories rose 5 million barrels or more in a week was six months ago, during the week that ended on January 15.

Stockpiles of distillates, the oil variant required for making the diesel needed for trucks, buses and trains, as well as the fuel for jets, grew by 2.668 million barrels last week, versus a forecast build of 1.591 million and a previous weekly decline of 1.266 million.

Historical EIA data showed the last time distillates inventories rose as much or more was 6-½ months ago, during the final week of December.

Analysts expressed surprise with the large builds, which were atypical for summer.

“It is certainly one of the weakest summer demand periods for both crude and fuel products,” John Kilduff, founding partner at New York energy hedge fund Again Capital, said.

The inventory builds come on the back of a weakening too in crude oil prices, which fell 20% over the past month to just under $100 a barrel, as analysts said energy costs were fueling inflation at four-decade highs and stifling economic growth.

US consumer prices increased by more than 9% over the year to June, hitting new four-decade highs, the US Labor Department said earlier on Wednesday.

Unleaded gasoline, the most in-demand fuel product at US pumps, currently averaged $4.63 a gallon, versus the record high of $5.01 a month ago, the American Automobile Association said.