U.S. commercial crude oil stocks increased 2.57 million barrels to 457.998 million barrels in the week that ended September 4, Energy Information Administration (EIA) data showed. Analysts surveyed Tuesday by Platts had expected a 300,000-barrel increase. Despite the weekly build, U.S. crude oil production was estimated to have fallen 83,000 barrels per day (b/d) to 9.135 million b/d. Moreover, continental U.S. output dropped 208,000 b/d to 8.683 million b/d. An uptick in Alaskan production helped offset the total decrease.

Continental U.S. production was still 7.8% greater than the EIA's estimate one year ago, but the size of the weekly change emboldens the argument U.S. production may be finally easing in response to lower prices.

The New York Mercantile Exchange (NYMEX) October crude oil was holding onto a rally Thursday in the wake of the EIA data release. The crude oil benchmark was trading $1.21 higher at $45.36 per barrel (/b) Thursday afternoon and narrowing its discount to Intercontinental Exchange (ICE) Brent to less than $3/b at one point.

Another factor limiting last week's inventory build was imports, which were down 396,000 b/d to 7.459 million b/d, slightly above the year-to-date average of 7.309 million b/d.

Crude oil runs fell 279,000 b/d to 16.11 million b/d, as refineries continued winding down operations.

For the week ended September 4, crude oil runs were about 6% below the summer peak of more than 17 million b/d seen at the end of July.
The amount of crude oil processed by refineries has fallen five weeks in a row, suggesting the autumn turnaround season may have begun earlier than usual this year.

The biggest weekly decline was seen on the U.S. Gulf Coast (USGC), where crude oil runs fell 418,000 b/d to 7.986 million b/d. The last time USGC refinery crude oil runs were below 8 million b/d was mid-March.

Cracking margins on the USGC using West Texas Intermediate (WTI) crude oil averaged $4.41/b last week, compared with a moving 30-day average of $9.37/b, Platts data showed. Platts margin data reflects the difference between a crude's netback and its spot price. Netbacks are based on crude oil yields, which are calculated by applying Platts product price assessments to yield formulas designed by Turner, Mason & Co.

The total refinery utilization rate decreased 1.9 percentage points to 90.9% of operable capacity, exceeding analysts' expectation of a 0.5 percentage points decline.

GASOLINE STOCKS DRAW

U.S. gasoline stocks increased 384,000 barrels last week to 214.547 million barrels. Analysts were looking for stocks to be unchanged.

Increases were seen across all regions except the U.S. Atlantic Coast (USAC). The Midwest saw the biggest gain, with gasoline stocks up 1.721 million barrels to 49.12 million barrels.

On the USAC -- home to the New York Harbor-delivered NYMEX reformulated blend stock for oxygenate blending (RBOB) futures contract -- gasoline stocks drew 2.409 million barrels last week.

At 57.409 million barrels, USAC gasoline stocks are less than 1% above where they stood one year ago and represent their lowest level since December.

Distillate stocks built 952,000 barrels last week to 150.903 million barrels, compared with analysts' expectation of a 700,000-barrel increase.

By region, the biggest increase was seen in the Midwest, where distillate stocks increased 849,000 barrels to 30.787 million barrels.

That increase was partly offset by the West Coast, where distillate stocks fell 765,000 barrels to 13.036 million barrels.
Source: Platts