Oil prices tumble to seven-week lows on surprise build in U.S. crude stocks (NYSEARCA:USO)

Crude oil futures fell to their lowest levels in seven weeks on Wednesday after US data showed a sudden and sharp weekly increase in crude oil inventories, as exports fell and refineries reduced their capacity use.

The US Energy Information Administration reported Crude oil stocks It rose by 7.3 million barrels During the week ending April 26, it was the largest weekly increase since February, and a wide difference from analysts’ expectations for a withdrawal of 1.1 million barrels in a Reuters poll.

“The rough construction is a big one. “At this time of year we should be withdrawing crude oil as more barrels pass through the refinery,” Mizuho's Robert Jawger told Reuters.

The EIA also announced a surprise increase of 300,000 barrels in gasoline inventories, compared to expectations for a decline of 1.2 million barrels.

The “potential supply-side support” came from a slight rise in the implied measure of consumer demand for gasoline, with gasoline supply rising by a modest 195,000 barrels per day from a two-month low, Sevens Research Report said contributing editor Tyler Ritchie Market monitoringBut this statistic “lacks conviction” as the four-week average fell by 317,000 bpd to 8.58 million bpd, suggesting “Consumer demand for fuel continues to deteriorate“.

Traders also continued to monitor negotiations for a ceasefire between Israel and Hamas, which at least temporarily eased concerns about potential disruptions to oil flows in the Middle East.

Front-month Nymex crude (CL1:COM) closed for June delivery -3.6% to $79.00 per barrel, and July Brent crude (CO1:COM) closed the earliest. -3.3% To $83.44 a barrel, the lowest settlement for both benchmarks since March 12 and the largest single-day dollar and percentage decline since January 8.

ETFs: (NYSEARCA:use), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)

Oil extraction capacity from the Permian Basin is expected to shrink next month due to scheduled pipeline maintenance, which is already pushing the premium for WTI delivered east of Houston to the highest level. In nearly three yearsAs reported by Reuters.

Exxon's (XOM) 642-mile Wink to Webster pipeline, which ships more than 1 million barrels per day of crude oil and condensate from the Permian Basin to the Gulf Coast, is scheduled to stop in June for a scheduled 10-day maintenance period.

The spread between WTI and the same crude delivered to the Magellan terminal east of Houston reached its widest point on Monday at a premium of $1.25 per barrel, the widest since June 2021, according to LSEG data.