Gasoline stocks rose by 3.3 million barrels, compared with analysts’ expectations in a Reuters poll for a 580,000 barrels gain. Distillate stockpiles, which include diesel and heating oil, rose by 4.4 million barrels, versus expectations for a 281,000 barrels increase, the EIA data showed.
The EIA data also showed a drop in gasoline demand of about a half million barrels a day, a surprising development given that the data reflected the start of the summer driving season following the Memorial Day holiday.
U.S. gasoline futures on the New York Mercantile Exchange fell about 4 percent after the data was released.
Prices had fallen earlier on Tuesday on renewed concerns about the efficacy of OPEC-led production cuts, as tensions rose within the export group over Qatar and U.S. output continues to grow.
The U.S. Energy Information Administration (EIA) said on Tuesday U.S. crude oil production could hit a record 10 million bpd next year, up from 9.3 million bpd now, putting it nearly on a par with top exporter Saudi Arabia.
In the nearer term, with fuel production and consumption largely balanced according to the EIA, the market is focused on inventories, which remain bloated.