U.S. crude oil in storage rose by the largest amount on record on Wednesday, and analysts are looking overseas for answers.
The stunning 14.4 million barrel weekly increase was underscored by a rise in crude imports of 2 million barrels a day. Traders scrutinize the weekly data from the world's biggest oil consumer, because falling stockpiles will play a big part in balancing the market and boosting depressed crude prices following a prolonged supply glut.
The jump in imports is partly seasonal. Refineries are once again taking in crude following the post-summer maintenance period.
But this is not simply a demand story, according to Matt Smith, director of commodity research at ClipperData. Global crude loadings for export were at a record in October, he noted.
"Most of the large exporters in the world have all been increasing exports in the last month, and this crude has to go somewhere. Even though U.S. production is ticking higher again, we're still seeing strong imports," he told CNBC.
The U.S. import increase came after weekly OPEC exports hit an all-time high of 29 million barrels a day, according to ClipperData.
Higher exports from Iran are to be expected as it returns to the international oil marker, but top exporter Saudi Arabia also dialed up its shipments to 8.4 million barrels a day, while Libya's exports doubled from levels seen in recent months.
Outbound flows from Nigeria also continue to recover following a series of outages, and Angola's exports have rebounded from a brief dip in September.
In just four weeks, the Organization of the Petroleum Exporting Countries will attempt to hammer out production limits as members seek to stabilize the oil market. The increase in exports ahead of the meeting does not bode well, according to Again Capital founding partner John Kilduff.
"It means there's no deal. Everybody's racing to produce as much as they can. The battle for market share persists and the glut's going to be with us for a while," he said.
Even if U.S. crude imports normalize, refinery activity remains too low in the near term, making it likely traders will see more inventory builds, Kilduff said.
This week's U.S. stockpile build was due in part to a drawdown of crude oil sitting in floating storage off the refinery-lined Gulf Coast, which saw imports jump by 900,000 barrels a day.
Two weeks ago, ClipperData warned that supply had swelled to 23 million barrels, above the typical level of 12 million barrels. In the week through Oct. 28, it fell to 15.9 million barrels.
But that number has crept higher this week. As of Wednesday, ClipperData was tracking 19 million barrels floating offshore in the Gulf of Mexico.