U.S. crude oil stocks rose to a fresh record last week, the Energy Information Administration said, as a surge in imports and rising domestic production more than offset a hike in refinery runs.
Crude stocks in the world’s top oil consumer have been building since the beginning of the year and undermining hopes that an OPEC-led deal to cut production will reduce a persistent global glut.
Crude inventories rose 5 million barrels in the week to March 17, nearly double expectations for a 2.8 million- barrel build, as imports soared 1.1 million barrels per day.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose 1.4 million barrels, the EIA said.
The report immediately resulted in a bout of selling.
U.S. West Texas crude futures extended losses to trade as low as $47.01 a barrel after the data, and was last trading 1.6 percent lower on the day at $47.48 by 10:59 a.m. EDT (1659 GMT).
Brent crude, meanwhile, broke through $50 a barrel for the first time since Nov. 30, and was last at $50.29 a barrel, down 1.3 percent.
“The market remains nervous about rising U.S. production, which is also reducing the effectiveness of output cuts by the OPEC and some non-OPEC countries,” said Abhishek Kumar, Senior energy analyst at Interfax Energy in London.
U.S. production rose modestly to 9.13 million barrels per day on the week, but has been steadily rising and is higher than year-ago levels.
On the bullish side, the data showed a notable increase in crude processing as refiners come out of seasonal maintenance and begin to gear up for the summer driving season in the United States.
Refinery crude runs rose 329,000 bpd as utilization rates rose 2.3 percentage points to 87.4 percent of capacity, led by higher runs at U.S. Gulf Coast and Midwest refiners.
“This is evidence that refinery maintenance is wrapping up for this season,” said David Thompson, executive vice-president at Powerhouse, an energy commodities broker in Washington. “Expect to see increases on balance over the next six to eight weeks.”
Gasoline stocks fell 2.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.0 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 1.4 million-barrel drop, the EIA data showed.
Source: Reuters (Reporting By David Gaffen; additional reporting by Ethan Lou and Scott DiSavino; Editing by Marguerita Choy)