U.S. crude stocks plunged by much more than expected last week as refining and export activity increased, while gasoline and distillate inventories also fell, the Energy Information Administration said on Wednesday.
Crude inventories fell by 12.2 million barrels to 448.5 million barrels in the week ending June 28, the EIA said, compared with analysts’ expectations in a Reuters poll for a 680,000-barrel draw.
“Strong exports, a slight drop in imports, and a rebound in refinery runs colluded to draw crude inventories,” said Kpler oil analyst Matt Smith.
“Both gasoline and distillates also showed draws despite higher refinery runs, with implied demand higher for both–particularly for gasoline–as gas stations stocked up ahead of the Independence Day holiday weekend,” Smith said.
Refinery crude runs were up by 260,000 barrels per day, the EIA said, while refiners’ utilization rates rose by 1.3 percentage points.
Despite the drawdowns, oil prices were little changed, with trading muted ahead of the July 4th holiday and as some investors doubted the market had more room for gains.
“Based on the reaction, it seems to look as the market believes it (the report) was a one-off,” said UBS analyst Giovanni Staunovo. “We need to see ongoing similar reports to see oil prices moving higher.”
Market participants were also concerned about an increase in barrels from the Organization of the Petroleum Exporting Countries, Growmark Energy said in a note.
U.S. gasoline stocks fell by 2.2 million barrels in the week to 231.7 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.3 million-barrel draw.
Distillate stockpiles, which include diesel and heating oil, fell by 1.5 million barrels in the week to 119.7 million barrels, versus expectations for a 1.2 million-barrel drop, the EIA data showed.
Crude stocks at the Cushing, Oklahoma, delivery hub, meanwhile, gained 345,000 barrels on the week, the EIA said.