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US crude and fuel inventories posted surprise stock builds last week, the Energy Information Administration said on Wednesday, as crude imports hit a six-week high and gasoline, distillate demand slipped.
Crude inventories rose by 1.3 million barrels to 443.2 million barrels in the week ended May 16, the EIA said. Analysts in a Reuters poll had expected a 1.3 million-barrel draw.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 457,000 barrels.
Net U.S. crude imports rose for the third consecutive week, increasing by 110,000 bpd last week to 2.58 million bpd, the EIA said, a six-week high.
"The increase in crude supplies was disappointing based off expectations, and we didn't see the drawdown in gasoline inventories that we thought we were going to see," said Phil Flynn, senior analyst with Price Futures Group.
Crude futures pared gains after the data, with Brent futures LCOc1 briefly turning negative following the surprise build in crude stocks.
"The report saw builds for crude, gasoline and distillate, which market participants did not like," said Giovanni Staunovo, analyst at UBS.
Refinery crude runs rose by 89,000 barrels per day (bpd). Refinery utilisation rates rose by 0.5 percentage points to 90.7% in the week.
US gasoline stocks rose by 816,000 barrels to 225.5 million barrels, the EIA said, compared with analysts' expectations for a 520,000-barrel draw.
"Implied oil demand rose only modestly versus last week, not supporting renewed product draws," said Staunovo. "Demand for oil products should rise over the coming weeks, with the start of the driving season," he added. - Reuters