US crude stocks at lowest level since February
Last week, US crude stocks dropped by the largest weekly drawdown since December as imports significantly declined. Inventories of refined products also fell, according to data from the US Energy Information Administration.
According to the EIA, crude inventories fell 5.2 million barrels in the week to May 5. Analysts had anticipated a drop of 1.8 million barrels.
US crude inventories now stand at 522.5 million barrels, the lowest since February.
Crude imports also fell last week by 799,000 barrels per day (b/d) to 6.9 million b/d, the biggest reduction since mid February and the first time they have been below 7 million b/d since early March.
Inventories at the Cushing, Oklahoma, delivery hub for US crude futures fell 438,000 barrels.
The reduction in inventories helped boost oil prices that have been bogged down by investors’ concerns about the global oversupply of crude.
By 11:12 a.m., US crude futures were up $1.30 to $47.18/barrel and Brent crude was up 2.5 per cent to $49.98/barrel.
However, while US production rose, refining runs declined, giving pause to some analysts.
“The headline crude oil drawdown number is certainly supportive, but it could be something a shooting star. The refinery utilization rate has come down quite a bit, after topping out a couple of weeks ago,” John Kilduff, partner with energy hedge fund Again Capital told Reuters.
The EIA reported that refinery crude runs fell 418,000 b/d and utilization rates dropped by 1.8 per cent to 91.5 per cent of overall capacity, after hitting a record high of 94.1 per cent three weeks ago.
Gasoline stocks fell 150,000 barrels, compared with analysts’ expectations of a 538,000-barrel decline. Distillate stockpiles, including diesel and heating oil dropped 1.6 million barrels, against expectations of a 1.0 million-barrel draw.
US crude production rose from 9.29 million b/d to 9.31 million b/d last week.
Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics told Reuters that “Growing oil output in the U.S., which reached its highest level since August 2015, will remain a thorny issue for price bulls.”
