U.S. commercial crude oil stocks rose a bearish 6.81 million barrels to 370.54 million barrels during the reporting week ended October 4, U.S. Energy Information Administration (EIA) data showed. The larger-than-expected build was likely a product of sharply lower crude oil runs as many U.S. refineries conduct seasonal maintenance.

Net inputs of crude oil to U.S. refineries fell 555,000 barrels per day (b/d) to 14.89 million b/d the week ended October 4, outpacing a 320,000 b/d decline in crude oil imports, which fell to 8.04 million b/d.

Analysts surveyed Monday by Platts anticipated a much smaller, 2.2 million-barrel build.

The drop in crude oil runs helped push U.S. refinery utilization rates 3 percentage points lower to 86% of capacity, the lowest since the week ended April 26, when rates were 84.4% of capacity.

Analysts surveyed expected U.S. run rates to have fallen 1 percentage point.

The build was largest on the U.S. Gulf Coast (USGC), where crude oil stocks rose 4.89 million barrels to 188.61 million barrels. USGC crude oil runs fell 168,000 b/d to 7.79 million b/d, helping to lower regional refinery utilization 2.6 percentage points to 87.7% of capacity.

Platts reporting shows Motiva's 600,000 b/d Port Arthur, Texas, refinery reported flaring on October 2 due to equipment failure at the facility's No. 4 vacuum pipe still; however, it was not clear that the event had any impact on production.

Additionally, Total's 174,000 b/d Port Arthur refinery lost power for a period of time early in the week ended October 4, only a few days after a separate process unit upset.

Tropical Storm Karen-related impacts likely fall outside of the EIA's data reporting timeline, which has a Friday morning cut-off.

Also contributing to the USGC build was a 159,000 b/d increase in imports, which rose to 3.85 million b/d the week ended October 4, EIA data shows.

Imports from Saudi Arabia, most of which head to the USGC, rose 299,000 b/d to 1.53 million b/d. Imports from Mexico also rose, up 198,000 b/d to 993,000 b/d.

Midwest crude oil stocks rose 703,000 barrels the week ended October 4; however, stocks at Cushing, Oklahoma -- delivery point for the New York Mercantile Exchange (NYMEX) crude oil futures contract -- fell 168,000 barrels to 32.62 million barrels.

This puts Cushing stocks 9.2% above the EIA five-year average. That said, stocks at the storage hub have fallen for the past 14 consecutive reporting weeks, and are down from 51.18 million barrels for the week ended April 19.

Midwest crude oil runs fell 122,000 b/d to 3.26 million b/d the week ended October 4, and imports from Canada rose 64,000 b/d to 2.41 million b/d.

U.S. West Coast (USWC) crude oil stocks rose 1.17 million barrels the week ended October 4 to 53.15 million barrels, EIA data shows. USWC crude oil runs fell 64,000 b/d to 2.38 million b/d.

Platts reporting shows a fluid catalytic cracker at Tesoro's 120,000 b/d Anacortes, Washington, refinery was shut the week ended October 4 due to unplanned maintenance.

Crude oil stocks on the U.S. Atlantic Coast (USAC) rose 456,000 barrels amid a 156,000 b/d reduction in crude oil runs, which fell to 955,000 b/d. This helped to take USAC refinery utilization 10.1 percentage points lower to 76% of capacity, the lowest since the week ended March 8, when USAC run rates were 74.5% of capacity.

U.S. distillate stocks fell by 3.14 million barrels the week ended October 4, nearly double analysts' expectations. The draw accounts for a 3.45 million-barrel decline in U.S. ultra low sulfur diesel (ULSD) stocks, which fell to 103.04 million barrels.

At 126.04 million barrels, U.S. distillate stocks are at a five-year low for this reporting week, and more than 15% below the EIA five-year average.

U.S. distillate production at 4.62 million b/d is down 268,000 b/d from the week ended September 27, but is nearly 290,000 b/d above year-ago levels, and nearly 470,000 b/d above the EIA five-year average.

The tightness in inventories is likely a reflection of sustained distillate exports. While EIA weekly export data is just an estimate, the 1.39 million b/d reported for the week ended October 4 is consistent with the more reliable monthly figure for July, which shows U.S. exports were around 1.38 million b/d.

That said, distillate stocks fell 1.27 million barrels on the USAC to 22.59 million barrels, which could be a reflection of increased end-user demand ahead of the winter heating season.

Implied demand* for U.S. distillates was largely flat at 3.83 million b/d, EIA data shows.

Combined low and ULSD stocks on the USGC fell 896,000 barrels to 34.82 million barrels the week ended October 4.

Midwest low and ULSD stocks fell 1.02 million barrels.

U.S. gasoline stocks rose 149,000 barrels to 219.88 million barrels the week ended October 4, below analysts’ expectations.

Stocks on the USAC -- home to the New York Harbor-delivered NYMEX RBOB contract -- rose a bearish 2.4 million barrels to 58.36 million barrels.

This puts USAC gasoline stocks 13.6% above the EIA five-year average and nearly 30% above year-ago levels.

USAC gasoline imports rose 17,000 b/d to 576,000 b/d, the highest since the week ended August 23 at the height of the U.S. summer driving season.

That said, gasoline stocks fell throughout much of the rest of the U.S. as implied demand for U.S. gasoline rose 319,000 b/d to 8.85 million b/d the week ended October 4.

USGC gasoline stocks fell 939,000 barrels; Midwest stocks fell 835,000 barrels; and USWC stocks fell 682,000 barrels.

* Implied demand is the amount of product that moves through the U.S. distribution system, not actual end consumption.
Source: Platts