By David Gaffen
(Reuters) – U.S. crude oil stockpiles soared while fuel demand slumped last week, each by their most in one week ever, government data showed on Wednesday, as the U.S. oil industry felt the full brunt of efforts to stem the spread of the coronavirus pandemic.
The oil markets have crashed as the pandemic has sapped fuel demand worldwide, virtually shutting down commercial aviation worldwide and cutting off gasoline demand as people stay home and businesses remain shuttered.
U.S. fuel demand has dropped by about one-third in the last three weeks, according to the U.S. Energy Information Administration, with last week’s fall of 3.4 million barrels per day the most ever.
Crude stocks , meanwhile, rose by 15.2 million barrels in the week to April 3, their biggest-one week rise. Much of those inventories were sent to the key Cushing, Oklahoma, storage hub, where stocks rose by 6.4 million barrels last week, EIA said, also the most in one week ever.
“There are multiple bad angles: Refining utilization. Crude stockpiles. Cushing is crazy – that’s a gigantic number,” said Bob Yawger, director of energy futures at Mizuho in New York.
Both of those estimates far exceeded expectations, and U.S. physical crude prices have plunged dramatically as pipelines expect storage to fill rapidly, forcing production to be shut in.
Crude output has already started to drop as well, with U.S. daily production plunging 600,000 barrels per day to 12.4 million bpd, in its biggest decline since July 2019, the EIA said.
U.S. gasoline stocks rose by 10.5 million barrels in the week, also exceeding expectations and falling just shy of an all-time record. Gasoline product supplied in the most recent week slumped by 24% to 5.1 million bpd.
Refineries severely pulled in the reins this most recent week, with crude runs falling 1.3 million bpd. Refinery utilization rates tumbled 6.7 percentage points to drop to just 75.6% capacity use.
Distillate stockpiles , which include diesel and heating oil, rose by 476,000 barrels in the week, versus expectations for a 1.4 million-barrel rise, the EIA data showed.
Net U.S. crude imports rose last week by 149,000 bpd last week, the EIA said.
(Reporting By David Gaffen; Editing by Marguerita Choy)
