U.S. crude stocks rose unexpectedly last week, but gasoline and distillate inventories were lower, the U.S. Energy Information Administration said on Wednesday.

Crude inventories rose by 2.3 million barrels in the week to Dec. 16, compared with expectations for a decrease of 2.5 million barrels.

The build came even as crude stocks at the Cushing, Oklahoma, delivery hub fell by 245,000 barrels, the EIA said. That was just the second drop in stocks at the key U.S. oil storage hub in the last eight weeks.

Oil and product prices dipped after the report, which was seen as bearish and counters Tuesday’s report from the American Petroleum Institute, an industry group, which showed a sharp drop in crude inventories.

U.S. crude futures fell 24 cents to $53.05 a barrel, off 0.5 percent, while Brent crude lost 33 cents, or 0.6 percent, to $55.02 a barrel.

“The crude oil inventory rise makes for a bearish report, especially since year-end destocking efforts usually produce a large decline,” said John Kilduff, partner at Again Capital LLC in New York.

Distillate stockpiles, which include diesel and heating oil, fell by 2.4 million barrels, versus expectations for a 1.2 million-barrel drop, the data showed.

Heating oil demand picks up as the weather turns colder, which should cause distillate stocks to fall. Inventories of distillates, which include diesel, heating oil and other fuels, ran higher than the long-term average for all of 2016, hurting refining margins.

Stocks have recently started to decline, but at 153.5 million barrels, U.S. distillate inventories still remain at their highest seasonally since 2010.

Andrew Lipow, president of Lipow Oil Associates, said the data would help refiners. “Both distillate and gasoline inventories dropped, so that’s good for refining margins,” he said.

Gasoline stocks fell by 1.3 million barrels, compared with analyst expectations in a Reuters poll for a 1.4 million-barrel gain.

Refinery crude runs rose by 184,000 barrels per day, EIA data showed. Refinery utilization rates rose by 1 percentage point.

U.S. crude imports rose last week by 1.039 million barrels per day.

Source: www.reuters.com