U.S. EIA crude inventories unexpectedly surged by nearly 19 million barrels last week, the third-largest increase in history, and oil prices still rose more than 3% intraday

Official U.
S.
data showed that U.
S.
crude oil inventories surged
last week instead of falling as the market expected.

On Wednesday, January 11, Eastern time, the Energy Information Administration (EIA) under the U.
S.
Department of Energy released data showing that

In the week ended Jan.
6, U.
S.
EIA commercial crude inventories rose 18.
961 million barrels from the previous week, the largest weekly increase since February 2021 and the third-largest weekly increase on record, while analysts expected a decline of at least about 2.
2 million barrels, an increase of 1.
694 million barrels
the week before.

In Cushing, the main delivery of U.
S.
crude oil futures, EIA crude oil inventories rose by 2.
511 million barrels month-on-month last week, the largest weekly increase since December 2021.

U.
S.
net crude imports rose by 2.
71 million b/d last week, bringing total net imports to 4.
2 million b/d, the highest since July 2022, while crude oil exports last week posted their biggest weekly decline since May 2021
.

U.
S.
EIA gasoline inventories rose by 4.
11 million barrels month-on-month last week, with analysts expecting an increase of 1.
2 million to 1.
3 million barrels, after a 300,000-barrel
decline the week before.

Including diesel and heating oil, EIA refined oil inventories fell by 1.
069 million barrels month-on-month last week, with analysts expecting an increase or decrease of 500,000 barrels, down 1.
4 million barrels
the week before.

Usually a surge in crude oil inventories is a bearish signal that demand may be weak, but crude oil futures still volatile to the upside
after the EIA data on Wednesday.

During the morning session of U.
S.
stocks, the U.
S.
WTI crude oil futures front-month contract only fell below $76 in the short term, and soon regained $76, and continued to rise, U.
S.
stocks rose above $77.
70 at midday, refreshing the intraday high since Tuesday, January 3, and the intraday rise expanded to more than
3%.

Brent crude rose above $82.
80 in midday in U.
S.
stocks, also hitting an intraday high since January 3, and rose more than 3%
during the day.
U.
S.
oil is expected to close higher for five consecutive trading days for the first time since October 7, 2022, and Brent oil is expected to close higher
for three consecutive days for the first time since December 21, 2022.

The media believes that the surge in U.
S.
crude inventories last week partly reflects the slowdown in refiners to resume production after a temporary shutdown due to severe cold weather
.
The optimism of the rise in crude oil came mainly from the adjustment
of epidemic prevention in China, the largest oil importer.

More than 15 million barrels of crude oil added last week came from the Gulf of Mexico, with most of the increase in inventories being affected by disruptions to refining operations
.
Last week finally demonstrated this impact
, which was not reflected in previous data.
Moreover, the Biden administration only slightly released 800,000 barrels of Strategic Petroleum Reserve (SPR) last week, the smallest weekly release since January 2022
.

On Tuesday, EIA released its monthly report, which forecasted a 9% increase in combined gasoline, diesel and jet fuel inventories in 2023, in which the EIA raised its forecast for US crude oil production in 2023 to a record high of 12.
34 million b/d
.
U.
S
.
crude oil production reached 12.
2 million b/d last week, unchanged from post-pandemic highs.