U.S. crude oil stockpiles rose last week after shutdowns stemming from Tropical Storm Harvey knocked refinery use to a seven-year low, the Energy Information Administration (EIA) said Sept. 7.
Refinery utilization rates dropped 16.9 percentage points to 79.7% of total capacity, with Gulf Coast refining runs dropping to the lowest level recorded since data started being kept in 1992.
Overall refining runs fell 3.3 million barrels per day (bbl/d) to 14.5 million bbl/d in the week to Sept. 1, EIA data showed. Rates will be slow to rebound as refiners from Corpus Christi, Texas, to Lake Charles, La., were in the process of inspecting and restarting operations.
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"Refinery runs were cut as the storm approached; I expect this trend will continue in next week’s stats which will reflect the full storm impact on Texas Gulf Coast refining," said Andrew Lipow, president of Lipow Oil Associates in Houston.
A number of refineries, offshore platforms and portions of key pipelines had resumed operations as of Sept. 6, after Harvey hit the Texas coast on Aug. 25 and knocked out roughly 4.2 million barrels per day (bbl/d) of refining capacity, or nearly 23% of total U.S. capacity.
Some of those refineries have come back online, though many are running at reduced rates. In the most recent week, refining runs for Gulf refineries fell to a rate of 6 million bbl/d, a 35% decline, due to Harvey.
The market's reaction was relatively quiet, as traders expected the data would show Harvey's effects. U.S. West Texas Intermediate crude futures dropped 24 cents to $48.91/bbl as of 10:38 a.m. CST (15:38 GMT), while gasoline futures slid 1.5% to $1.6485 a gallon. Brent futures dropped 13 cents to $54.07/bbl.
Crude inventories rose 4.6 million bbl last week, compared with analyst expectations for an increase of 4 million bbl.
Crude stocks at the Cushing, Okla., delivery hub rose by 797,000 bbl, the EIA said.
Gasoline stocks fell 3.2 million bbl, compared with expectations in a Reuters poll for a 5.4 million-bbl drop.
Distillate stockpiles, which include diesel and heating oil, fell 1.4 million bbl, vs. expectations for a 3.5 million-bbl drop, the EIA data showed.
U.S. crude imports fell last week by 73,000 bbl/d.
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