U.S. crude oil, gasoline and distillate inventories fell last week as both refining activity and fuel demand rose, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories dropped by 2.5 million barrels to 457 million barrels in the week ending May 10, the EIA said, compared with analysts’ expectations in a Reuters poll for a 543,000-barrel draw.
The draw came as refinery crude runs rose by 307,000 barrels per day (bpd) and plant utilization rates increased by 1.9 percentage points in the week to 90.4 per cent of total capacity, according to the EIA.
Crude futures pared losses following the report. Brent was trading at $82.29 a barrel, down 0.1 per cent at 11:02 ET (1502 GMT), while U.S. crude was nearly unchanged on the day at $77.99.
U.S. gasoline and diesel futures also pared earlier losses, with gasoline futures turning positive after a surprise draw in inventories.
“Refiners finally got serious,” said Bob Yawger, director of energy futures at Mizuho. He cautioned, however, that product-supplied for gasoline, a proxy for demand, remained below seasonal norms ahead of the Memorial Day weekend at the end of May that officially kicks off the summer driving season.
Gasoline product supplied was at 8.9 million bpd last week, up slightly from the week before. However, the four-week average for product supplied of gasoline was at 8.7 million bpd, versus 9.1 million bpd for the same period last year.
“Historically speaking, you’re going to have demand numbers above 9 million bpd at this point in the U.S. heading into Memorial Day weekend. It’s hard to paint a rosy picture with gasoline demand still not where it needs to be,” he added.
Gasoline stocks fell by 235,000 barrels in the week to 227.8 million barrels, the EIA said, compared with expectations for a 537,00-barrel build.
Distillate stockpiles, which include diesel and heating oil, fell by 45,000 barrels in the week to 116.4 million barrels, versus forecasts for a 824,000-barrel rise, the EIA data showed.
Product supplied for distillates climbed by 342,000 bpd to 3.8 million bpd, the EIA said.
Net U.S. crude imports rose last week by 108,000 bpd, while exports declined by 333,000 bpd to 4.14 million bpd, EIA said.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 341,000 barrels, the EIA said.