“There is still a lot of oil going into Cushing and a lot of Canadian oil sand production, so supply is going to continue to build up,” said Flynn, who predicted that Cushing inventories rose 1.5 million barrels last week. “The reversal of Seaway is historic.”
Enbridge and Enterprise completed the Seaway reversal on May 17 and began accepting crude on May 19, according to the companies.
The 500-mile (805-kilometer), 30-inch Seaway line will initially be able to deliver 150,000 barrels per day, increasing to more than 400,000 in the first quarter of 2013, and the companies said in a statement last week.
The reversed line will supply refineries in Texas and Louisiana that account for about 35 percent of U.S. capacity, according to a filing from the companies with the Federal Energy Regulatory Commission.
Gasoline supplies probably fell 500,000 barrels to 203.8 million, the survey showed. Six analysts forecast a decline and five expected a gain. Inventories slid 2.8 million barrels to 204.3 million in the week ended May 11.
Regular gasoline at the pump, averaged nationwide, fell 0.9 cent to $3.68 a gallon yesterday, according to Heathrow, Florida-based AAA, the largest U.S. motoring group. It was the lowest level since Feb. 24. Prices have dropped 25.6 cents, or 6.5 percent, since reaching a 2012 high of $3.936 on April 4 as crude tumbled 8.8 percent.
Stockpiles of distillate fuel, including heating oil and diesel, dropped 500,000 barrels to 119.3 million. Seven analysts forecast a decline and four saw an increase. Distillates fell 969,000 barrels to 119.8 million in the week ended May 11.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington.