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Build-up in U.S. gasoline supplies last week, underscored by cost-conscious motorists cutting back on summer excursions, are expected to continue driving down fuel prices, according to analysts.
National gasoline supplies grew 3.3 million barrels during the week ended June 22 -- up for the tenth straight week, according to the American Petroleum Institute's (API) weekly report. Crude oil supplies, meanwhile, rose a meager 565,000 barrels and heating oil supplies rose 2.16 million barrels.
The gasoline supply build comes at a time when driving demand should be increasing at a faster pace to reflect typical seasonal demand. "While demand is not pitifully low for gasoline, it is certainly being crimped," Tim Evans, an analyst for IFR-Pegasus, told Reuters.
Implied gasoline demand was 8.56 million barrels per day (bpd), down 50,000 bpd from the previous week, according to the data. The figure, however, was still a shade ahead of last year's demand -- perhaps due to lower pump prices this year, the report said. The gasoline data overshadowed a less-than-expected increase in crude oil inventories over the same period.
Analysts had forecast a crude oil supply build of more than 2 million barrels, betting that a 13 million barrel draw two weeks ago -- when Tropical Storm Allison delayed fuel imports -- would begin to trickle back in, according to Reuters.
Crude oil imports also increased last week by 838,000 bpd to 9.2 million bpd -- a rise that brings it back into a normal range after disruptions from Allison, the report said.