NEW YORK (AA) – Crude oil inventories increased for the first time in 10 weeks, the U.S. Energy Information Administration (EIA) said Wednesday.
Bucking the trend of the last nine weeks, and forecasts, commercial crude oil stocks rose 1.7 million barrels, or 0.3 percent, to reach 521.1 million barrels for the week ending July 22, EIA data showed.
"This was in sharp contrast to analysts’ expectations of a 2.3m barrel draw," said London-based research consultancy's U.S. Weekly Petroleum Status Report.
"Increases in domestic production and net imports helped the U.S. crude stocks build last week," noted Simon MacAdam, assistant economist at Capital Economics and author of the report.
Domestic crude production rose modestly by 21,000 barrels per day (bpd) to 8.51 million, but oil imports jumped 303,000 bpd to reach 8.44 million, according to the EIA.
Meanwhile, weekly gasoline inventories also increased 0.5 million barrels, or 0.2 percent, to 241.5 million barrels for the week ending July 22.
"With gasoline and distillate stocks so high, we are likely to see weaker demand for crude oil in the second half of the year, which should help keep a lid on prices," MacAdam said. "Today’s report was a bearish surprise for the market."
With the weekly increase in crude and gasoline inventories, fears about the glut of supply in global markets have revived, pushing oil prices down more than 2 percent.
American benchmark West Texas Intermediate fell 2.7 percent to as low as $41.74 from previous close, while international benchmark Brent crude dipped as low as $43.84, or 3.1 percent.