The United States held a record-high level of commercial crude oil inventories as of the week to June 19 following the collapse in demand in the lockdown and the slow demand recovery after lockdowns were lifted, data from the Energy Information Administration (EIA) showed on Monday.
In its latest Weekly Petroleum Status Report, the EIA reported a 1.4-million-barrel increase in crude oil inventories for the week to June 19. At 540.7 million barrels, U.S. crude oil inventories are still above the five-year average for this time of the year, and demand improvement seems to be going more slowly than hoped, as suggested by the change in fuels.
At nearly 541 million barrels of crude oil inventories for the week to June 19, the U.S. beat by 5 million barrels its previous record for the highest volume of commercial inventories from late March 2017, EIA data showed.
As of June 19, U.S. net commercial crude oil inventories were at 62 percent of total available storage capacity.
Commercial crude oil inventories in the U.S. Gulf Coast have jumped by 63 million barrels since March 13, when a national emergency was declared in the United States. The Gulf Coast inventories are currently sitting at an all-time high of 249 million barrels, according to the EIA.
However, the capacity utilization of the crude oil storage at Cushing, Oklahoma, dropped to 58 percent on June 19, from 83 percent capacity filled on May 1, the EIA has estimated. Fears of overflowing storage sent WTI Crude prices – based on physical delivery of WTI crude oil at Cushing – below zero on April 20 and 21.
Demand, especially gasoline demand, in the U.S. has been recovering from the April lows, but it is still well below the levels typical for this time of the year. Refinery capacity utilization is rising much slower as refiners and the market have to draw down excess inventories that surged at the start of the lockdowns.
By Charles Kennedy for Oilprice.com
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