The Energy Information Administration reported a 3.2 million barrel build in US commercial crude inventories for the week ending June 13, surprising analysts who had forecast a 1.5 Mb drawdown. Total inventories now sit at 458.6 Mb, approximately 4% above the five-year seasonal average.
The build was concentrated in the Gulf Coast, where stocks rose 2.1 Mb. Cushing, Oklahoma — the Nymex delivery point — saw inventories increase 1.2 Mb to 33.1 Mb. The rise at Cushing is bearish for WTI basis and contributed to the narrowing backwardation.
US crude production was unchanged at 13.2 Mb/d, while imports rose 0.8 Mb/d to 6.7 Mb/d, largely from Canada and Iraq. Exports fell 0.3 Mb/d to 4.2 Mb/d, partly due to narrower WTI-Brent arbitrage making US crude less competitive in European markets.
The product side was mixed. Gasoline inventories rose 0.8 Mb, while distillate stocks fell 0.4 Mb. The build in gasoline aligns with the weak demand data and suggests the market is entering summer with comfortable gasoline supply despite lower refinery runs.
The surprise build removes upside pressure. Cushing stocks rising is particularly bearish for WTI basis. Buyers with near-term requirements should target lifted pricing at WTI $75-76. If Cushing inventories continue to build, the risk of a storage-driven selloff increases.