US crude oil stocks moved sharply higher in the week ended Dec. 4 as exports tested multiyear lows and imports surged to levels last seen in July, US Energy Information Administration data showed Dec. 9.
Commercial crude inventories climbed 15.19 million barrels higher to 503.23 million barrels last week. It was the largest one-week build since the week ended April 10 and pushed inventories to nearly 11% above the five-year average, opening the widest supply overhang since late September.
The build was realized mostly on the US Gulf Coast, where stocks surged 11.79 million barrels to a 15-week high 273.96 million barrels, and on the US West Coast, where stockpiles climbed 3.19 million barrels to 47.75 million barrels.
But inventories at the NYMEX delivery point of Cushing, Oklahoma, moved 1.36 million barrels lower to 58.21 million barrels, a nine-week low.
The build comes as weekly exports slid nearly 47% on the week to 1.83 million b/d, the lowest since October 2018.
US crudes have faced increasingly stiff competition in Europe from rapid return of Libyan production, which has climbed to almost 1 million b/d in the past two months after the UN-backed Government of National Accord and the self-styled Libyan National Army agreed a truce.
Libyan crude and condensate exports are poised to jump to a 13-month high of 1.24 million b/d in December, according to S&P Global Platts estimates compiled using data from shipping and trading sources.
In November, Libyan Es Sider crude held an average $1.63/b discount to the Med Dated Brent strip, compared to an 82 cent/b discount for WTI MEH. But US crudes have made up some ground in recent weeks. WTI MEH has averaged at a $1.27/b discount to Med Dated Brent to-date in December, compared with an average Es Sider discount of 93 cents/b.
Further padding US crude inventories, crude oil imports jumped 1.08 million barrels to 6.48 million b/d. The 20% weekly uptick put inbound crude volumes at the highest since the week-ended July 3.
Refinery demand climbs, remains weak
Refinery net crude inputs climbed 420,000 b/d to 14.44 million b/d as the nationwide utilization rate climbed 1.7 percentage points to 79.9% of total capacity. The 3% weekly uptick put net inputs at the highest since the week ended August 21, however refinery demand was still around 14% behind the five-year average and runs remained within a range that has persisted since mid-summer.
Total gasoline inventories climbed 4.22 million barrels to 237.86 million barrels, EIA said, pushing them 4.6% above the five-year average and opening the widest surplus since mid-August. The build comes as implied gasoline demand continued to slide, falling 370,000 b/d to 7.6 million b/d – the weakest since the week ended May 29 and more than 14% behind year-ago levels.
Fast-rising COVID-19 infection numbers have stressed health resources nationwide, prompting state and local governments to impose increasingly strict lockdowns measures that likely added headwinds to gasoline demand last week.
In some regions, weak gasoline demand has pushed surpluses to levels last seen in early summer, at the tail end of the first wave of pandemic lockdowns. Atlantic Coast gasoline inventories were nearly 11% above the five-year average after climbed 1.97 million barrels to 62.38 million barrels, the widest surplus since the week ended July 3. Midwest stocks are now close to 5% above normal, the highest since early June, after a 1.58-million-barrel increase pushed stocks to 51.78 million barrels.
Apple Mobility Index data accessed by Platts showed US driving activity in the week ended Dec. 4 was at the lowest since the week ended May 22.
Total distillate stocks climbed 5.22 million barrels to 151.09 million barrels. The build left stocks within their most recent five-year range, but widened the surplus to the five-year average to around 11%, a three-week high.