Surprise uptake in US inventories lowers oil prices

Crude oil and gasoline inventories in the U.S. surprisingly increased last week against market expectations, driving oil prices lower on Wednesday.

Commercial crude oil stocks rose by 5.8 million barrels, or 1.3 percent, to 438.1 million barrels for the week ending May 18, the U.S.’ Energy Information Administration (EIA) data showed. The market expectation was a decline of 1.5 million barrels.

Gasoline stocks also increased by 1.9 million barrels, or 0.8 percent, to 233.9 million barrels during the same period. The market expectation was a drop by 1.4 million barrels.

“The rise in crude stocks was mainly driven by a jump in net imports, which in turn, was due to both an increase in imports and a fall in exports,” Thomas Pugh, a commodities economist at the London-based Capital Economics, said in a note.

The U.S.’ crude oil imports rose by 558,000 barrels per day (bpd) to 8.16 million bpd for the week ending May 18, according to the EIA, while crude oil exports fell by 818,000 bpd to 1.75 million bpd.

After the surprise increase in crude oil and gasoline inventories, oil prices showed losses.

On Wednesday, international benchmark Brent crude declined as much as to $78.22 per barrel, while American benchmark West Texas Intermediate fell as low as to $71.19 a barrel.

Meanwhile, the U.S.’ crude oil production increased slightly by 2,000 bpd to 10.725 million bpd for the week ending May 18, according to the EIA data.

This marked the 18th time that crude oil output in the U.S. showed an increase in the past 19 weeks.

This article provided by NewsEdge.