A sudden rise in crude oil inventories and a jump in imports

commercial reserves oil Crude oil rose sharply last week in the United States as the market waited for a deflation, according to figures released on Wednesday by the US Energy Information Agency (EIA), a move linked to the acceleration of imports.

At the end of the week ending January 27, these commercial stockpiles rose by about 4.1 million barrels, while analysts had expected a decline of 1 million barrels, according to a Bloomberg consensus. This is the sixth consecutive week of increases in commercial stocks, which have now reached their highest levels since June 2021.

More than 18 million barrels are imported

The publication was poorly received by the market. Rising ahead of the weekly report, the price of a barrel of American West Texas Intermediate (WTI) for March delivery fell 0.70% around 4:10 PM GMT, to $78.32. The marked increase in crude reserves is largely due to the jump in imports (+23%) and the drop in exports (-26%). Thus, net imports (imports minus exports) increased by 18 million barrels from the previous week.

For Kpler’s Matt Smith, the increase in imports is due to the return to service, after a spill in Kansas, of the Keystone pipeline, which carries Canadian oil to the United States. More importantly, the high level of commercial inventories is associated with a slight slowdown in refinery activity, whose utilization rate fell to 85.7%, compared to 86.1% in the previous week.

The end of January and February traditionally correspond to a maintenance period for refineries, which actually limits their capabilities. For the third week in a row, the US strategic oil reserves remained unchanged, as the US government decided not to use these stocks once they have been depleted for a period of 16 months. Last week also saw a pickup in demand for refined products (+3.4%), driven by gasoline, kerosene and propane.

Gasoline demand rose significantly above its level last year at the same time. However, Matt Smith points out that gasoline reserves increased by 2.6 million barrels, more than analysts expected, which is likely to depress prices. As for production, it remained unchanged at 12.2 million barrels per day.

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