News wire — U.S. crude oil stockpiles dropped last week to their lowest levels since January 2020, the Energy Information Administration said on Wednesday.
Inventories have been declining for several months as U.S. fuel demand has rebounded with Americans getting vaccinated against coronavirus. Infections, however, are surging again and analysts are watching to see if fuel demand slackens, particularly across southern states where the number of people infected has surged.
Crude inventories fell by 3.2 million barrels in the week to Aug. 13 to 435.5 million barrels, exceeding estimates for a 1.1 million-barrel drop. Crude exports rose in the most recent week to 3.4 million barrels per day (bpd).
“The crude draw will be very supportive for the market. There’s a good demand from exports, probably to do with the recent price decline,” said John Kilduff, partner at Again Capital LLC in New York. “This report should push back against worries about the (coronavirus) Delta variant that have crept into the market.”
At the Cushing, Oklahoma, delivery hub, crude stocks fell by 980,000 barrels in the last week, the EIA said. Inventories at the nation’s largest oil storage hub and delivery point for U.S. crude futures have dropped for 10 straight weeks and are now at their lowest levels since October of 2018, at 33.6 million barrels.
Oil prices rose after the report showed the bigger-than-expected crude build. By 11:16 a.m. EDT (1516 GMT), U.S. crude oil rose 6 cents to $66.65 a barrel and Brent crude was up 29 cents at $69.32 a barrel
U.S. gasoline stocks rose by 696,000 barrels in the week to 228.2 million barrels, the EIA said, compared with analysts’ expectations for a 1.7 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 2.7 million barrels in the week to 137.8 million barrels, versus expectations for a 276,000-barrel rise.
Refinery crude runs fell by 191,000 barrels per day in the last week, EIA said. Refinery utilization rates rose by 0.4 percentage point, in the week.
The four-week average of overall product supplied to the market – a measure of demand – was 20.8 million barrels per day, in line with pre-coronavirus levels from 2019.
U.S. crude production rose to 11.4 million bpd, though weekly figures are volatile. Shale oil production, which accounts for most of U.S. output, is expected to rise to 8.1 million bpd in September, its highest since April 2020, according to the EIA’s monthly drilling output report.
- Reuters (Reporting By David GaffenEditing by Marguerita Choy)