US Crude Stockpiles Hit 20-Month Highs As Refinery Outages Weigh

WASHINGTON (Pakistan Point News / Sputnik - 02nd February, 2023) US crude oil inventories have hit 20-month highs after a string of refinery outages led to a non-stop buildup in stockpiles over a six-week period, data from the Energy Information Administration (EIA) showed on Wednesday.

US crude inventories rose by 4.14 million barrels during the week ended January 27, EIA said in its Weekly Petroleum Status Report.

The build was way above the 376,000-barrel rise forecast by industry analysts polled by US media, and compared with the 533,000-barrel build reported by the EIA during the previous week to January 20.

The EIA has reported a total crude build of 34.5 million barrels over the past six weeks.

At their current standing of 824.3 million barrels, crude stockpiles are at the highest since June 2021, the EIA said.

A rash of unplanned refinery outages have led to the pile up of crude on the market.

PBF Energy, a refinery producing diesel in Chalmette, Louisiana was knocked out last month by a fire.

Exxon Mobil is performing planned maintenance on several units at its Baytown, Texas, petrochemical complex.

Scheduled maintenance had been lengthier than expected this winter, with many US Gulf Coast refineries still running below capacity after Winter Storm Elliott disrupted some 1.5 million barrels per day of refining capacity in December. A Suncor refinery in Commerce City, Colorado, was among those taken offline after the storm.

Maintenance has also been delayed by legacy problems caused by the now three-year-old coronavirus pandemic, with refiners reportedly planning twice as many overhauls this spring than usual.

These disruptions to normal refinery operations have restrained an expected rally in crude prices since the start of the year, with US crude trading at below $76 a barrel versus forecasts for $85 and above.

On the gasoline inventory front, the EIA reported a build of 2.576 million barrels, versus the forecast of 1.442 million and the previous week's rise of 1.763 million.

Gasoline inventories have gone up by almost 13 million barrels since 2023 began. The automotive fuel is the No. 1 US fuel product.

Distillate stockpiles also rose, for the first time in five weeks. Here, there was a build of 2.32 million barrels versus the expected deficit of 1.3 million. In the previous week, distillate draws stood at 507,000 barrels.

Until last week, distillates, which are refined into heating oil, diesel for trucks, buses, trains, and ships, and fuel for jets, were the strongest component of the US petroleum complex in terms of demand. Prior to the build in the latest week, distillate stockpiles had fallen by around 5 million barrels over four weeks.