News wire — U.S. crude oil stockpiles dropped sharply from record highs, as refining activity picked up and imports fell, the Energy Information Administration said on Wednesday.
Crude inventories fell by 7.2 million barrels in the week to June 26 to 533.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 710,000-barrel drop. Inventories are down from an all-time record of 540.7 million barrels set in mid-June, but remain 15% higher than the five-year average for this time of year.
Net U.S. crude imports fell last week by 506,000 barrels per day, the EIA said. Imports had been elevated in recent weeks due to a flood of shipments arriving from Saudi Arabia that were booked as the kingdom boosted activity in April. Saudi imports came to 826,000 bpd in the most recent week, their lowest in six weeks.
“As OPEC+ continues to cut, the probability of reduced imports into the United States will remain,” said Tony Headrick, energy markets analyst at CHS Hedging.
Refinery crude runs, meanwhile, rose by 193,000 bpd and refinery utilization rates rose by 0.9 percentage point to 75.5% of overall capacity, the data showed.
Demand slipped in the most recent week, and the four-week average of product supplied still showed that figure off by 16% from the year-ago period.
Gasoline supplied was down by 15% from a year earlier, and traders worried that surging coronavirus cases in the United States would cut off the steady rebound in demand from April and May’s slump.
Crude futures were higher, but retraced some gains from prior to the data release. U.S. crude gained 23 cents to $39.51 a barrel by 11:17 a.m. ET (1517 GMT) while Brent rose 43 cents to $41.70 a barrel.
“The main reason oil is pulling back is disappointing gasoline demand,” said Phil Flynn, senior analyst at Price Futures in Chicago.
Distillate stockpiles, which include diesel and heating oil, fell by 593,000 barrels in the week to 174.1 million barrels.
U.S. gasoline stocks rose by 1.2 million barrels, the EIA said, compared with expectations for a 1.6 million-barrel drop.