U.S. crude and fuel inventories fell last week, the Energy Information Administration (EIA) said on Aug. 24, while weakening gasoline consumption fanned concerns about slowing demand.
Crude inventories fell by 3.3 million barrels in the week to Aug. 19 to 421.7 million barrels, compared with analysts’ expectations in a Reuters poll for a 933,000-barrel drop.
The inventory decline would have been larger if not for another big release of barrels from U.S. Strategic Petroleum Reserve (SPR). The U.S. released more than 8 million barrels from the SPR last week, offsetting a drop in production and a modest uptick in refining activity.
After rebounding last week, overall U.S. gasoline demand sunk in the most recent period, leaving the four-week average of daily gasoline product supplied 7% below the year-earlier period. Analysts are concerned by weak demand for fuels, saying it augurs for a notable slowdown in economic activity.
“While the crude inventory was especially bullish, the plummeting demand for gasoline is dragging the market down,” said Andrew Lipow, president of Lipow Oil Associates. “To me, that is the most notable item in the statistics.”
Both Brent and U.S. crude futures fell about 1% following the report.
Crude production slipped 100,000 bbl/d to 12 million bbl/d, data showed.
Refinery runs fell by 168,000 bbl/d in the week, the EIA said, boosting refinery utilization rates by 0.3 percentage point to 93.8%, still at high levels even as driving season is nearing its end.
U.S. gasoline stocks fell by 27,000 barrels in the week to 215.6 million barrels, compared with expectations for a 1.5 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 661,000 barrels in the week to 111.6 million barrels.
Net U.S. crude imports rose last week by 862,000 bpd, the EIA said. Exports fell to 4.2 million bbl/d, after hitting a record 5 million bbl/d the week previous.
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