USA: Unexpected rise in crude oil inventories, but demand rebounds

Crude oil inventories rose unexpectedly last week in the United States, the 12th in 13 weeks, according to figures released Wednesday by the U.S. Energy Information Agency (EIA). U.S. commercial reserves rose by 1.1 million barrels as of the end of the week of March 17, while analysts expected a decline of 1.8 million, according to a Bloomberg consensus. This build-up was due, in part, to a new statistical adjustment by the EIA, which added about 14 million barrels to the volumes that fed the US market. This is in contrast to the increase in exports of refined products, which reached a near-record level last week.

Nevertheless, demand for refined products has shown encouraging signs of recovery. Gasoline reserves fell sharply by 6.4 million barrels, far more than the 2.3 million decrease expected by analysts. The movement is explained, in part, by a rebound in U.S. domestic demand, which rose back above the symbolic threshold of 20 million barrels per day, up 4.7% from the previous week. Distilled products, which include gas oil, and propane also increased significantly, by 6.3% and 45.0% respectively.

The EIA release benefited crude oil prices, which rose after starting the session around equilibrium. Around 15:00 GMT, U.S. West Texas Intermediate (WTI) for May delivery was up 0.86% to $69.93 a barrel. U.S. crude oil production rose slightly to 12.3 million barrels per day last week, up from 12.2 million barrels per day.