A slowdown in US refinery activity and record weekly oil production helped offset record crude exports last week, Energy Information Administration oil data showed Thursday.
EIA pegged US crude output at 12 million b/d for the first time last week, up from 11.9 million b/d the week prior.
As a result, US commercial crude stocks rose 3.67 million barrels, to 454.51 million barrels, for the reporting week ended February 15. The build was in line with market expectations. Analysts surveyed Tuesday by S&P Global Platts had been looking for a 3.5 million-barrel build.
Crude stocks in the US Gulf Coast rose 1.67 million barrels to 232.64 million barrels last week, as regional crude runs slipped 99,000 b/d to 8.46 million b/d. USGC crude runs were last any lower in early-March. Further, the build comes despite US exports -- which come chiefly from the USGC -- rose 1.24 million b/d to 3.61 million b/d, the highest weekly total on record, according to EIA data.
The jump in exports was likely triggered by a steadily wide Brent/WTI spread, which widened beyond $10/b over the past week. A wide Brent/WTI spread helps traders hedge export flows.
A rebound in generally weak crude imports into the region also helped stocks build. USGC imports jumped 1.09 million b/d to a still-modest 2.52 million b/d.
Crude stocks at Cushing, Oklahoma -- the delivery point for the NYMEX WTI futures contract -- jumped 3.41 million barrels to 45.02 million barrels. Cushing stocks have risen steadily since hovering around 22 million barrels in early September.
Over that period, prompt NYMEX WTI structure has moved firmly into contango. The prompt-month/sixth-month WTI contango was almost $2/b Wednesday, compared with a backwardation of nearly $2/b in late-August.
US gasoline stocks appear to be leveling off after surging for the better part of the past four months. Stocks fell in line with analysts' expectations, down 1.45 million barrels to 256.85 million barrels.
The draw most pronounced in the US Atlantic Coast, where stocks dropped 1.93 million barrels to 67.59 million barrels. This took stocks to 2.5% below the five-year average, a key indicator of the health of regional gasoline supply.
This is the first time USAC gasoline stocks have been at a deficit to the five-year average since mid-May, and a far cry from the better-than-20% surplus seen in early October.
Prompt NYMEX March RBOB remains in a seasonal contango of around 15 cents/gal, but that has eroded significantly from the near 20 cents/gal seen last week.
US distillate stocks also fell in line with analysts' expectations, down 1.52 million barrels to 138.68 million barrels last week.
