US inventory increase defies markets

Figures released by the US energy department on Thursday show that despite expectations of a fall in crude oil inventories, stockpiles actually rose in the week ending May 27.

Heating oil stockpiles retreated, but gasoline stockpiles also grew more than expected.

Crude oil stockpiles rose 1.4 million barrels on the week to 333.8 million barrels, which was near to a six-year high. Imports of crude oil were up by almost 400,000 barrels per day to 10.4 million barrels per day.

Gasoline inventories rose by 1.3 million barrels to 216.7 million barrels, above average for this time of the year, while distillate inventories grew by 700,000 barrels overall.

However, heating oil inventories fell by 700,000 barrels, making the overall increase dependent on a rise in diesel fuel inventories.

On the New York Mercantile Exchange, July West Texas Intermediate contracts fell 35 cents from Wednesday’s close to $54.25 per barrel, but only after it rose earlier in the day to $55.40, a six-week high. Prices on WTI contracts for the rest of the year fell less than that, and prices for next year’s WTI contracts increased by over $2 per barrel.

IPE Brent July delivery was down at late afternoon in London to $53.10 per barrel, a drop of 14 cents from Wednesday’s close. This decline, however, also came after an early rise to almost $54 per barrel.