Oil futures fell sharply Wednesday after US Energy Information Administration data showed weekly builds in crude, gasoline and distillate stocks, with NYMEX July crude down $2.47 to settle at $45.72/b.

After eight straight weekly draws, crude stocks rose 3.295 million barrels last week to 513.207 million barrels, raising the surplus to the five-year average to 109.847 million barrels.

Analysts surveyed Monday by S&P Global Platts were looking for crude stocks to have declined 3.5 million barrels last week.

American Petroleum Institute data released Tuesday evening showed crude stocks drawing 4.6 million barrels last week.

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“The market was primed for another sizable US crude stock draw but then the DOE reported a large crude stock build instead,” DNB Bank oil market analyst Torbjorn Kjus said in a note.

ICE August Brent settled $2.06 lower Wednesday at $48.06/b.

Crude runs fell by 283,000 b/d last week to 17.227 million b/d, while imports rose 356,000 b/d to 8.341 million b/d, pushing stocks higher.

“It was clearly a bearish report mitigated a little bit by the first drop in US production in some time, but that’s more likely a temporary glitch than long-term drop,” said Kyle Cooper, consultant at ION Energy.

Output from the Lower 48 states fell 20,000 b/d to 8.815 million b/d, EIA estimated. That was only the second weekly decline so far this year.

The oil complex’s drop Wednesday “comes after recent volatility in response to a fresh diplomatic rift between Qatar and a coalition of countries led by Saudi Arabia, and skepticism over the [nine-month] OPEC cut extension,” Citi Research analysts said in a note.

Global financial markets will turn attention Thursday to the UK general election; a European Central Bank monetary policy meeting; and testimony by James Comey, former director of the Federal Bureau of Investigation, before the US Senate Intelligence Committee.

All three events have the potential to move markets, particularly the US Dollar Index, which could by extension impact oil futures. The dollar and oil are seen as having a negative correlation.

PRODUCT FUTURES TUMBLE

US gasoline stocks rose 3.324 million barrels to 240.348 million barrels in the week ended June 2, EIA data showed. Analysts were looking for a 250,000-barrel build.

Gasoline implied demand fell 505,000 b/d to 9.317 million b/d. Over the last four weeks, demand has averaged 9.574 million b/d, which was 65,000 b/d below the year prior but 452,000 b/d above the five-year average.

NYMEX July RBOB settled 6.32 cents lower at $1.4913/gal.

US distillate stocks increased 4.355 million barrels last week to 151.088 million barrels. Analysts were looking for stocks to be unchanged.

NYMEX July ULSD fell 5 cents to settle at $1.4162/gal.

–Geoffrey Craig, geoffrey.craig@spglobal.com

–Edited by Annie Siebert, ann.siebert@spglobal.com

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