U.S. crude oil stockpiles fell more than expected last week, while gasoline and distillate inventories rose as refining activity picked up and demand dropped, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories fell by 3.7 million barrels to 429.3 million barrels in the week ended Aug. 2, the EIA said, compared with analysts’ expectations in a Reuters poll for a 700,000-barrel draw.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 579,000 barrels, the EIA said.
Oil futures extended gains, climbing 2 per cent following the larger-than-anticipated decline in inventories. Brent crude was trading at $78.08 a barrel while West Texas Intermediate (WTI) futures were at $78.90 a barrel by 10:40 a.m. ET (1440 GMT).
“This is starting to become a trend – the sixth week in a row crude has fallen and plays into the mantra that supplies are tightening and demand is exceeding supply,” said Phil Flynn, an analyst at Price Futures Group.
The EIA on Tuesday forecast tighter supply and demand balances for 2024, raising its outlook for oil consumption but lowering its expectations for production.
Refinery crude runs rose by 252,000 barrels per day, and utilization rates were up by 0.4 percentage point to 90.5 per cent of total capacity in the week, the EIA said.
Net U.S. crude imports rose last week by 552,000 bpd, while exports were down 1.28 million bpd to 3.64 million bpd, the EIA said.
Gasoline stocks rose by 1.3 million barrels in the week to 225.1 million barrels, the EIA said, compared with expectations for a 1 million-barrel draw.
Distillate stockpiles, which include diesel and heating oil, rose by 900,000 barrels in the week to 127.8 million barrels, versus expectations for a 200,000-barrel build, data showed.
U.S. gasoline and diesel futures also climbed following the report, despite the rise in stockpiles and data showing lower demand.
Total gasoline product supplied, a proxy for demand, fell by about 283,000 bpd to 8.97 million bpd, and distillate product supplied declined by 256,000 bpd to 3.47 million bpd.
“The bearish element was of course the drop in gasoline demand. I don’t expect us to get back over 9 million barrels any time soon,” said John Kilduff, founding partner of Again Capital.