US crude stockpiles drop the most since September
NEW YORK (Reuters) — US crude oil inventories last week dropped the most in ten months, falling more than expected as imports declined and refining rates rose, while gasoline stocks decreased although demand remained lackluster, the Energy Information Administration said on Wednesday.
Crude inventories fell 7.6 MMbbl in the week to July 7, compared with analysts' expectations for a decrease of 2.9 MMbbl.
The decline was the biggest since the week ended Sept. 4.
The largest crude draw was in the Gulf Coast region, where crude stockpiles fell 6.1 MMbbl, the biggest weekly draw since May.
Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures fell by 1.9 MMbbl to 57.6 MMbbl, their lowest level since November 2015, EIA said.
US inventories have been closely watched amid market concerns that US output from shale formations could offset OPEC's efforts to throttle back production and curb a global supply glut.
US crude briefly rallied to a session high of $46.48/bbl after the data was released before paring gains. US crude was trading up 22 cents at $45.26 by 11:04 a.m. EST (1604 GMT). Global benchmark Brent crude traded up 5 cents a barrel at $47.57.
The report was initially bullish because of the large crude stockpile drawdown, however, analysts cautioned that the levels fell short of expectations set by trade group data from the American Petroleum Institute released on Tuesday that showed a hefty 8.1 million-barrel draw.
Also, at 495.4 MMbbl, US crude oil inventories were in the upper half of the average range for this time of year.
"The country’s gasoline demand remains lacklustre and gasoline stocks are still above the five-year average, which will cap gains in crude and gasoline prices," said Abishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.
Gasoline stocks fell 1.6 MMbbl, compared with analysts' expectations in a Reuters poll for a 1.1-MMbbl gain, but were in the upper half of the average range, the EIA said.
US gasoline demand over past four weeks was also 0.3% lower from year ago.
Refinery crude runs rose by 103,000 bpd to 17.2 MMbpd, nearing record high rates of 17.5 MMbpd reached at the end of May, as utilization rates rose 0.9 percentage point to 94.5% of total capacity, EIA data showed.
US crude imports fell last week by 282,000 bpd, while exports rose to 918,000 bpd from 768,000 bpd.
Distillate stockpiles, which include diesel and heating oil, rose 3.1 MMbbl, versus expectations for a 1.1-MMbbl increase, the EIA data showed.
Reporting By Jessica Resnick-Ault; Editing by Marguerita Choy
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