WTI futures tumble as US crude inventories hit record high, Brent follows

West Texas Intermediate and Brent crude plunged to session lows after the Energy Information Administration reported a larger-than-expected jump in US crude oil inventories last week that sent supplies to the highest in at least 80 years. Domestic production also hit a new record.

US crude for delivery in March fell by 3.18% to $48.43 per barrel by 15:38 GMT, shortly after it touched a session low of $48.05. The contract settled 5.37% lower on Tuesday at $50.02 and is down 6.3% for the week so far.

Meanwhile on the ICE, Brent for settlement in the same month traded 3.56% lower at $54.42 a barrel, having shifted in a daily range of $57.00-$53.91. The contract slid 3.27% to $56.43 on Tuesday. Brent’s premium to its US counterpart narrowed to $5.99 from yesterday’s close at $6.41.

The Energy Information Administration reported that US crude oil stockpiles rose by 4.868 million barrels in the seven days through February 6th to 417.9 million, the highest level for this time of the year in more than 80 years. Analysts had projected a jump of 3.73 million barrels. Supplies at the Cushing, Oklahoma, storage hub increased to 42.6 million barrels from 41.4 million a week earlier, the highest in a year.

Moreover, US crude production rose by 49 000 barrels per day to 9.226 million bpd, the highest for weekly statistics dating back to January 1983. Crude imports fell by 101 000 bpd to 7.286 million, while the four-week average of inbound shipments was at 7.328 million bpd, 3.6% below year-ago levels.

US refineries operated at 90.0% of their operable capacity, compared to 89.9% a week earlier. Gasoline production decreased to 8.7 million barrels per day, while distillate fuel output increased to 4.7 million bpd.

Total motor gasoline inventories rose by 1.977 million barrels last week to 242.6 million, exceeding projections for a minor 0.2-million jump, while distillate fuel stockpiles slid by 3.252 million barrels to 131.2 million, compared to an expected decline of 0.817 million barrels.