U.S. crude stocks up, output at highest level since April 2020
U.S. crude stocks rose in the most recent week while U.S. production hit its highest level since April 2020, a signal that high prices are driving further output in the world’s largest oil producer.
Gasoline stocks fell sharply and demand rebounded modestly, though the last four weeks of gasoline consumption has been softer than in 2021, the Energy Information Administration said on Wednesday.
Crude inventories rose by 5.5 million barrels in the week to August 5 to 432 million barrels, compared with expectations in a Reuters poll for a 73,000-barrel rise.
The increase was driven by a 5.3 million barrel release from U.S. strategic reserves; the United States has been emptying its reserve to quell the rise in oil prices that began in the spring.
Production rose to 12.2 million barrels a day, highest since the outset of the coronavirus pandemic in the United States, and a signal that drillers are seeing value in boosting output in the face of higher costs. Weekly figures are volatile, however.
The increase in output and slide in demand has lowered sky-high oil prices in recent weeks. U.S. crude fell by 2.2% to $88.34 a barrel as of 10:44 a.m. EST (1544 GMT) while Brent dropped 2.3% to $94.09 a barrel.
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