US crude stocks down 3.6 million barrels
US crude stocks fell and inventories of gasoline and distillates rose last week after refineries boosted production rates to the highest since November, 2015, according to the Energy Information Administration.
The EIA reports crude inventories fell by 3.6 million barrels in the week ending April 21. Analysts had predicted stocks would fall by 1.7 million barrels.
The drop is marks the third straight week US crude stocks have fallen, which may be a signal that the global supply glut of crude may be easing.
US crude futures turned positive and were up 34 cents to $49.90/barrel while Brent crude was up by 6 cents to $52.16/barrel.
“The report was somewhat supportive for prices, due to the overall crude oil inventory drawdown resulting from a further rise in the refinery utilization rate and large upward spike in crude oil exports,” John Kilduff, partner at energy hedge fund Again Capital LLC in told Reuters.
Stocks at the Cushing, Oklahoma delivery hub for US crude futures fell by 1.2 million barrels, according to the EIA weekly report.
After completing seasonal maintenance, refineries preparing for the summer driving season ramped up production.
Refinery crude runs were up by 347,000 b/d and utilization rates increased by 1.2 percentage points to 94.1 per cent of total capacity, the highest since November, 2015.
Consumption has dropped to 19.5 million b/d, off 2.2 per cent from this time last year.
Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics told Reuters “Demand for refined products remains weak for this time of the year, which will be a cause for concern over the coming weeks if demand fails to recover.”
The EIA reported gasoline stocks rose 3.4 million barrels against analysts’ expectations of a 1 million barrel drop. US gasoline inventories are now at 2016 levels, which is seasonally high.
Distillate inventories, including diesel and heating oil, were up 2.7 million barrels. Analysts were expecting a drop of 1 million barrels.
Finally, US crude imports rose last week by 515,000 b/d to 7.8 million b/d and exports increased 587,000 b/d to 1.2 million b/d.
