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Crude Supplies Jump Sharply, Defying Expectations

The Associated Press

NEW YORK (AP) — Oil stockpiles rose last week, the government said Wednesday, despite expectations for the fourth straight week of declines as producers like OPEC slow exports.

Crude inventories rose by 2.9 million barrels, or 0.8 percent, to 366 million barrels, which is 20.3 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Analysts had expected a drop of 2 million barrels for the week ended May 29, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Crude prices have been rising steadily in recent weeks, partly as a hedge against inflation and partly on bets demand for oil will rise.

Gasoline inventories slipped by 200,000 barrels, or 0.1 percent, to 203.2 million barrels, which is 2.2 percent below year-ago levels. Analysts expected stockpiles of the motor fuel to fall by 1.5 million barrels.

Demand for gasoline over the four weeks ended May 29 was 0.4 percent lower than a year earlier, averaging about 9.2 million barrels a day.

U.S. refineries ran at 86.3 percent of total capacity on average, an increase of 1.2 percent from the prior week. Analysts expected capacity to rise to 85.7 percent.

Inventories of distillate fuel, which include diesel and heating oil, rose by 1.6 million barrels to 150 million barrels for the week ended May 29. Analysts expected distillate stocks to jump 950,000 barrels.

The jump in distillate stockpiles is partially due to warmer weather nationwide.

Crude prices fell $1.22 to $$67.33 per barrel on the New York Mercantile Exchange.