WTI futures tumble as US crude output reaches new record

West Texas Intermediate hovered near the lowest in almost six years after the Energy Information Administration reported that US crude production surged to the highest in more than three decades last week, while inventories of crude oil surged to a record as well.

US crude for delivery in March traded 2.60% lower at $45.03 per barrel at 15:46 GMT, having shifted in a daily range of $45.83-$44.52. The contract rose 2.39% yesterday to $46.23 a barrel.

Meanwhile on the ICE, Brent for settlement in the same month was down 1.01% at $49.10 per barrel, holding in a daily range of $49.65-$48.65. The European crude benchmark rose 2.99% on Tuesday to $49.60 a barrel, settling at a premium of $3.37 to its US counterpart. The gap widened to $4.07 on Wednesday.

The Energy Information Administration reported that US crude supplies surged by 8.874 million barrels in the week ended January 23rd to 406.7 million, the highest on weekly data spanning back to August 1982. Analysts had projected a jump of 4.25 million barrels. Inventories at the Cushing, Oklahoma storage hub rose for another week to 38.9 million barrels, from 36.8 million during the preceding period.

Domestic crude production jumped by 27 000 barrels per day to 9.213 million bpd, a record for weekly statistics tracked since January 1983, while net imports jumped by 204 000 bpd from a week earlier to 7.422 million. The four-week average of inbound shipments stood at 7.247 million bpd, 4.8% below year-ago levels.

Refinery utilization rates, however, rebounded to 88% from 85.5% a week earlier. Both gasoline and distillate fuel output decreased, averaging 9.2 and 4.7 million barrels per day, respectively.

Motor gasoline inventories declined by 2.587 million barrels to 238.3 million, defying analysts projections for a jump of 0.32 million. Distillate fuel stockpiles, which include diesel and heating oil, decreased by 3.892 million barrels to 132.7 million, exceeding an estimated drop of 1.70 million.