By David Gaffen
(Reuters) – U.S. crude oil stockpiles rose less than expected last week while gasoline inventories dropped for the first time in five weeks, the Energy Information Administration said on Wednesday, as the sharp decline in fuel demand due to the coronavirus pandemic is ebbing.
Crude inventories rose by 9 million barrels in the week to April 24 to 527.6 million barrels, slightly less than analyst expectations for a 10.6 million-barrel increase.
Stocks of crude have increased for 14 consecutive weeks and are less than 2% from an all-time high of 535 million barrels reached in March 2017. Fuel demand worldwide is down roughly 30%, while U.S. fuel demand has dropped 28% in the last four weeks, EIA data showed.
U.S. gasoline stocks fell by 3.7 million barrels from its record high in the week to 259.6 million barrels, the EIA said, compared with expectations in a Reuters poll for a 2.5 million-barrel rise.
Refiners increased activity last week, and gasoline supplied by refiners increased, helping refiners run down some inventory.
Overall finished motor gasoline demand is still down 44% over the past four weeks from the year-ago period, but the week’s drawdown suggests that the consumption declines may be leveling off. Fuel demand overall has dropped by 28% in the last four weeks, with jet fuel demand down 62%.
“What stood out is the gasoline stockpiles – the market is taking heart from that,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
“I’m a little concerned that it’s bouncing a little too quickly. We still did see almost 9 million barrels (of crude) go into storage. And we’re still seeing weeks of that unless something changes.”
Crude oil prices bounced on the news. U.S. West Texas Intermediate crude (WTI) was up nearly 35%, or $4.25, to $16.61 a barrel as of 10:59 a.m. ET (1459 GMT). Brent gained 14%, or $2.83, to $23.29.
Crude stocks at the Cushing, Oklahoma, delivery point for WTI rose by 3.6 million barrels in the last week, EIA said. The hub has over 63 million barrels in stock, with most of the rest of the space already leased out.
Refinery crude runs rose by 305,000 barrels per day, boosting refinery utilization rates by 2 percentage points to 69.6% of total capacity.
Distillate stockpiles, which include diesel and heating oil, rose 5.1 million barrels, more than the 3.6 million-barrel rise forecast, EIA data showed.