By March 15, 2017 Read More →

US crude stocks drop, reversing nine weeks of builds: EIA

US crude stocks

US crude stocks were expected to increase by 3.7 million barrels, however, the EIA reports inventories fell by 237,000 barrels last week.  

US crude stocks down by 237,000 barrels last week

US crude stocks fell for the first time in nine weeks and gasoline and distillate inventories fell more than anticipated, according to the Energy Information Administration.

The EIA reports crude inventories fell by 237,000 barrels last week, against analysts’ expectations of an increase of 3.7 million barrels.

At the Cushing, Oklahoma delivery hub, crude stocks rose by 2.13 million barrels.

US crude imports dropped by 565,000 b/d to 6.69 million b/d last week, the lowest level in a month, largely due to declines from OPEC member countries.

Imports from Saudi Arabia fell by 426,000 b/d to 1.08 million b/d, the largest weekly drop since September.  Crude imports from Iraq dropped by 527,000 b/d to 403,000 b/d.  That is the largest drop since August.  Imports from Kuwait and Nigeria also fell last week.

Brent futures rose 83 cents to $51.75/barrel by 11:16 EDT.  In trading on Tuesday, prices hit a more than three-month low of $50.25.

US WTI crude was up by 82 cents, or 1.72 per cent, at $48.54.  On Tuesday, WTI fell to $47.09, the lowest since late November.

 

“It was a supportive report, due to the large drawdown in refined product inventories,”  John Kilduff, partner at Again Capital in New York told Reuters. “The crude drawdown was small, and was impacted by a drop in imports. The import levels continue to fluctuate in a wide-range week-to-week.”

Kilduff added despite the weekly drop, overall inventory levels remain quite high, relative to the seasonal average, which remains a significant headwind for the market.

The EIA also reported sharp drawdowns in gasoline and distillate, which may set up a potential for larger crude oil stockpile declines in April as refineries return from scheduled maintenance, according to Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.

A Reuters poll says gasoline stocks fell by 3.1 million barrels, higher than the anticipated 2 million barrel drop.

Distillate stocks, including diesel and heating oil, fell by 4.2 million barrels, greater than the 1.7 million barrel drop that had been forecast.

Refinery crude runs were down by 20,000 b/d and refinery utilization rates fell by 0.8 percentage points.

 

 

“An unexpected drawdown in the U.S. crude oil stock was a result of reduced imports from Canada despite marginal increase in domestic production,” Kumar told Reuters. “However, this unseasonal draw is not a trend and oil stock builds are expected to make a comeback.”

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