By Dan Molinski

U.S. inventories of crude oil unexpectedly increased sharply last week even as refinery activity reached a 2023 high, according to data released Thursday by the Energy Information Administration.

Benchmark U.S. oil prices that were higher before the report was released added to those gains afterward. The Nymex front-month crude contract for July delivery was recently up 1.6% at $69.17 a barrel.

Commercial crude-oil stockpiles jumped by 4.5 million barrels last week to 459.7 million barrels, and are now 2% below the five-year average, the EIA said. Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would fall by 1.4 million barrels from the prior week.

The rise came, in part, due to a 2.5-million-barrel transfer of crude oil last week from the nation's Strategic Petroleum Reserve to the commercial side, in transactions being conducted by the Department of Energy each week over the past few months.

Oil stored at Cushing, Okla., the delivery point for U.S. stocks, increased by 1.6 million barrels from the previous week to 38.9 million barrels, the EIA said in its weekly report.

U.S. crude-oil production declined by 100,000 barrels a day last week, to 12.2 million barrels a day, according to the EIA.

Gasoline stockpiles declined by 207,000 barrels to 216.1 million barrels, compared with analysts' expectations of a 900,000-million-barrel decrease.

Distillate stocks, which are mostly diesel fuel, rose by 985,000 barrels to 106.7 million barrels, but are still about 18% below the five-year average, the EIA said. Analysts had forecast distillates inventories would rise by 500,000 barrels last week.

The refining capacity utilization rate jumped by 1.4 percentage point from the previous week to a 2023 high of 93.1%. Analysts were expecting a smaller, 0.6-percentage-point increase.

 
   U.S. oil inventories for the week ended May 26: 
 
                  Crude  Gasoline    Distillates  Refinery Use 
   EIA data:       +4.5     -0.2         +1.0        +1.4 
   Forecast:       -1.4     -0.9         +0.5        +0.6 
 
 

Note: Numbers in millions of barrels, with the exception of refinery use, which is in percentage points.

Write to Dan Molinski at dan.molinski@wsj.com

(END) Dow Jones Newswires

June 01, 2023 11:43 ET (15:43 GMT)