U.S. crude oil stockpiles rose by 19 million barrels last week, the biggest one-week increase in history, the U.S. Energy Information Administration said, as refiners throttled back activity due to slumping demand as a result of the coronavirus pandemic.
The build for the week ended April 10 was much larger than the Reuters poll calling for a 11.7 million-barrel rise and offsets some of the optimism that had bloomed as a result of a worldwide pact between oil producers to cut output sharply. Crude futures slumped on the news.“Even though we knew it was going to be bad, it’s worse than people thought," said Phil Flynn, an analyst at Price Futures Group in Chicago."You look at gasoline demand and it’s pathetic.
Refiners have responded by cutting crude purchases and processing; they were operating at 69per cent of capacity nationwide , lowest since September 2008, and their actions to counter weak demand is rippling through pipeline companies and oil producers. The latter are being forced to cut production, as some pipeline companies have said they cannot ship oil unless it has a proven destination.
Refinery crude runs fell by 969,000 barrels per day in the last week, EIA said. Refinery utilization rates fell by 6.5 percentage points on the week.