Crude Oil Inventories Surprise Markets with Unexpected Build

The US Energy Information Administration (EIA) reported an unexpected rise in commercial crude oil inventories for the week ending July 31. The stockpiles increased by 2.5 million barrels, reaching a total of 407 million barrels. This figure surprised market analysts who had widely anticipated a draw of 1.5 million barrels.

The increase in crude stockpiles was primarily due to rising imports and slower processing at US refineries. Net crude imports increased by 297,000 barrels per day. Refinery utilization rates edged lower, dropping 0.7 percentage points to 96.5%, indicating that refiners processed less crude than in the previous week.

While crude inventories saw an unexpected build, the data for refined petroleum products presented a different picture. Gasoline stocks fell by 1.6 million barrels, and distillate inventories, which include diesel and heating oil, saw a larger draw of 3.5 million barrels.