EIA: US crude stocks post build against expectations, as imports slump and exports pull back sharply

US commercial crude inventories (excluding Strategic Petroleum Reserve) rose 3 million barrels to 426.4 million barrels in the week ended September 18, the EIA said, a build that ran counter to a Reuters poll calling for a 641,000 barrel draw, one of the wider expectation misses of the past month. Crude futures pared earlier gains on the release, with Brent trading at $101.33 a barrel, up $2.08, and WTI up 96 cents to $91.48.

Crude imports fell sharply, down 1.2 million barrels a day to 5.9 million, while exports pulled back to roughly 3.28 million barrels a day from the prior week's 4.83 million, a reversal of nearly 1.55 million barrels a day after last week's export surge. Even with both imports and exports retreating, net imports rose 369,000 barrels a day, meaning the export drop outpaced the import decline and left more crude in the domestic system, the direct driver behind the week's build. Domestic production ticked down just 5,000 barrels a day, effectively flat and not a factor in the swing.

Cushing stocks rose 2.2 million barrels to 23.7 million barrels, tracking the broader national build and pointing to easier delivery conditions at the NYMEX hub. Motor gasoline stocks fell 1.7 million barrels to 206 million barrels, missing a Reuters poll that had expected a 95,000 barrel build, a gap of close to 1.8 million barrels versus consensus and a sign gasoline demand held firmer than the crude side of the ledger suggested.

Coming off a week where exports surged and now a week where they've sharply cooled, the export line looks like the most volatile lever in the balance right now, and that swing, more than domestic output or the modest import pullback, is what pushed crude inventories the wrong way from what the market had priced in.

Written by: Farid Muzaffar