News wire — U.S. crude oil stockpiles fell sharply last week as refining rates hit their highest since March, while gasoline and distillate inventories rose, the Energy Information Administration said on Wednesday.
Crude inventories fell by 7.4 million barrels in the week to July 31 to 518.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 3 million-barrel drop.
Refinery utilization rates rose 0.1 percentage point to 79.6% of total capacity, their highest level since late March as the U.S. economy slowly recovers from the initial wave of the coronavirus pandemic. Refinery crude runs rose by 42,000 barrels per day, the EIA said.
Oil prices were slightly higher on the news, extending an earlier rally. U.S. crude gained 4% to $43.40 a barrel as of 10:51 a.m. ET (1451 GMT), while Brent rose 3.6%, or $1.60, to $46.03 a barrel.
U.S. gasoline stocks rose unexpectedly by 419,000 barrels in the week to 247.8 million barrels. They had been forecast to drop by 170,000 barrels.
“Gasoline was the second build in two weeks, that’s not good. Distillate was up to a 38-year high, so that continues to build,” said Bob Yawger, director of crude futures at Mizuho in New York.
Distillate stockpiles, which include diesel and heating oil, rose by 1.6 million barrels versus expectations for a 279,000-barrel rise, the data showed.
At just under 180 million barrels, distillate inventories were the highest since December 1982 for the third week in a row, while Gulf Coast distillates stockpiles rose to a record 61.8 million barrels, the EIA said.
Fuel demand continues to struggle, declining in the most recent week. Refined product supplied, a proxy for fuel demand, was down, along with motor gasoline supplied, which remains at roughly 9% below this time of year last year, according to EIA figures.