US crude stocks down by 930,000 barrels last week
US crude stocks fell by 930,000 barrels last week and gasoline inventories grew as demand remained weak, according to the Energy Information Administration on Wednesday.
The decrease in oil inventories was much less than the 2.3 million barrel drop analysts had anticipated. The decline marks the fourth straight week stocks have fallen, but at 527.8 million barrels, inventories are still 3 per cent higher than this time last year.
“It has been another fairly uninspiring report for the bulls,” Matt Smith, director of commodity research at ClipperData told Reuters.
Following the release of the weekly EIA report, oil markets turned negative. US crude futures were down 16 cents to $47.50/barrel by 10:50 a.m. and Brent fell 10 cents to $50.36/barrel.
According to the EIA, stocks at the Cushing Oklahoma delivery hub for US crude futures fell 728,000 barrels.
US crude production rose last week to 9.29 million b/d, the highest since August, 2015. Imports fell by 34,000 b/d.
Gasoline stocks rose by 191,000, to stand at 241.2 million barrels, a smaller-than-anticipated gain. Analysts had been expecting gasoline inventories to increase by 1.3 million barrels.
The increase in gasoline stockpiles reflects a 10 per cent jump over the seasonal average for the past decade. Over the past four weeks, gasoline demand was down by 2.7 per cent from this time last year.
Andrew Lipow, president of Lipow Oil Associates told Reuters “This is continuing a trend since the beginning of the year in which sales have been lower and that is casting a shadow on the market and pressuring crude oil prices.”
The EIA reported refinery crude runs were down from record highs, falling 108,000 b/d to 17.2 million b/d and utilization rates fell 0.8 per cent to 93.3 per cent of capacity.
Distillate stocks, including diesel and heating oil, were down by 562,000 barrels. Analysts had expected an increase of 723,000 barrels, according to EIA data.
