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Commodities2 hours ago (Jun 24, 2020 11:25AM ET)

© Reuters.  © Reuters. — Crude oil production jumped last week for the first time since March, while oil stockpiles also grew by more than expected, according to the Energy Information Administration.

The government estimated that production for the week ended June 19 was 11 million barrels a day, up from the 10.5 million barrel daily production the prior week and the first hike since mid-March, just before the full effect of coronavirus lockdowns hit the U.S. economy. Back then, production hit a record 13.1 million barrels per day.

last week rose 1.44 million barrels, the government said, more than the expected build of 299,000 barrels. Gasoline inventory declined 1.7 million barrels compared to an expected draw of 1.3 million barrels, while distillate stocks rose 249,000 barrels compared to an expected draw of 620,000.

stored at Cushing, Oklahoma, declined by 991,000 barrels. analyst Barani Krishnan said the production increase was surprising. “This is the first rise in production in 13 weeks, since we hit record highs of 13.1 million barrels per day,” he said. “It tells you that the shale crowd is already hedging production at $40 levels.As for crude stockpiles itself, there was another 2 million barrels that went into the SPR, while Cushing drew by just 1 million. That effectively means a net crude build of 2.4 million at least.The gasoline draw, meanwhile, was just about 300,000 barrels higher than forecast, while distillates had a build versus anticipated decline. It’s not surprising that the market is down by 4%.”

Oil fell more than 5%, to $38.18.

On Tuesday, data from the industry’s showed oil inventories increased 1.7 million barrels for the week ending June 19, well above the expected increase of 300,000 barrels.

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