U.S. crude oil stockpiles rose much more than expected last week, while distillate inventories surged as well, the U.S. Energy Information Administration said on Wednesday.

Crude inventories rose 2.3 million barrels in the week to Aug. 26, compared with expectations for an increase of 921,000 barrels.

Prices across the petroleum complex dipped on the data, as traders reacted to the build in inventories at a time when stocks have overall already been at high levels seasonally.

U.S. crude futures fell more than 2 percent, and were down $1.11 to $45.24 a barrel by 10:54 a.m. (1454 GMT).

“I would call this the trifecta of bearish news. We should be getting draws for this time of year,” said Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in New York.

“Not only are we getting shocking builds, we’re also being squeezed by the bullishness of the U.S. dollar and hurricane season that’s had very little impact thus far on actual crude production.”

Thus far during hurricane season, there have been few threats from hurricanes to the U.S. Gulf; a tropical depression currently in the Caribbean is expected to strengthen into a tropical storm, but it is forecast to land in Florida’s west coast, and not expected to threaten the energy hubs in Louisiana and Texas.

Distillate stockpiles, which include diesel and heating oil, rose 1.5 million barrels, versus expectations for a 157,000-barrel drop, the EIA data showed.

Crude stocks hit a seasonal record high for the U.S. Gulf Coast, the main refining hub for the United States, and crude stocks were also at a record on the East Coast, according to Energy Department figures.

Refining margins are at their weakest seasonally in six years, in part due to decisions made by refiners early in 2016 to produce more gasoline earlier in the season.

Gasoline stocks fell 691,000 barrels, compared with analysts’ expectations in a Reuters poll for a 1.2 million-barrel drop.

Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell 1.1 million barrels, EIA said.

Refinery crude runs fell by 64,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.3 percentage point.

U.S. crude imports rose last week by 254,000 bpd.

Source: www.reuters.com