US crude inventories climb to highest level in 83 years
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New York: US crude stockpiles grew to the highest level since 1931 as production climbed to the most in 26 years, data from the Energy Information Administration (EIA) showed.
Inventories rose 3.52 million barrels last week to 397.7 million barrels, according to the EIA, the energy department’s statistical arm. Weekly government statistics go back to 1982 and monthly figures to 1920.
“The rise in inventories is obviously a result of the surge in US crude production,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “It’s not an exaggeration to say the U.S. crude production industry is in the midst of a renaissance.”
Crude output climbed 59,000 barrels a day to 8.36 million, the most since January 1988. US production has surged as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies trapped in shale formations in the central US, including the Bakken in North Dakota and the Eagle Ford in Texas.
Output dropped to 3.81 million barrels a day in September 2005, when hurricanes Katrina and Rita hit the Gulf Coast and accelerated a long-term decline. Output declined in 17 of the 20 years through 2008 before rebounding, EIA data show.
Inventories along the Gulf Coast, known as PADD 3, rose 5.17 million barrels to 207.2 million last week, the most in EIA data going back to 1990. Stockpiles in the region have climbed since the southern leg of the Keystone XL pipeline began moving oil to the Gulf Coast from Cushing, Oklahoma, the nation’s biggest oil storage hub in January.
Imports slipped 475,000 barrels a day to 7.8 million in the seven days ended April 18. Arrivals have averaged 7.46 million barrels in 2014, according to EIA figures, down from 8.89 million for the first 14 weeks of 2012.
“Imports remain strong,” Kilduff said. “We’ve yet to wave off imports but may be nearing a breaking point because of swollen supplies along the Gulf Coast. When that occurs, there will be a major rebalancing of global markets.” Bloomberg