U.S. crude oil stockpiles dropped sharply last week as refineries boosted operations to their highest since January 2020, signaling continued improvement in demand, the Energy Information Administration (EIA) said on June 16.

Analysts said the 7.4 million-barrel drawdown in crude stocks in the week to June 11 to 466.7 million barrels, the fourth consecutive weekly decline, augurs for improved demand in coming weeks.

Net U.S. crude imports fell last week by 845,000 bbl/d, EIA said, driven by rising exports of nearly 1 million bbl/d.

Both exports and product supplied by domestic refiners increased sharply as consumer activity rebounds from 2020's coronavirus-induced weakness.

“There is a lot of new optimism about demand and I anticipate this will continue into the rest of the summer,” said Tony Headrick, energy market analyst at CHS Hedging.

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Refinery utilization rates rose by 1.3 percentage points to 92.6% of overall capacity, a level that predates the coronavirus pandemic in the U.S. Refinery crude runs rose by 412,000 bbl/d in the week, the EIA said.

“With refinery runs over 16 million barrels per day and exports continuing to be robust, it is going to be difficult for inventories to avoid consistent draws as we push on to the peak of summer driving season,” said Matt Smith, director of commodity research at ClipperData.

Product supplied, a proxy for market demand, rebounded from the previous week, rising to 20.6 million bbl/d. The four-week average of product supplied sits at 19.3 million bbl/d, roughly 6% below the same time period in 2019.

U.S. gasoline stocks rose 2 million barrels in the week, compared with analysts’ expectations in a Reuters poll for a 614,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 1 million barrels versus expectations for a 186,000-barrel rise.

Crude stocks at Cushing, Okla., the delivery point for benchmark U.S. crude futures, fell to about 43.6 million barrels, their lowest since March 2020, the data showed.

WTI oil prices in the U.S. were modestly higher after the data. U.S. crude rose 22 cents to $72.33/bbl as of 11:00 a.m. EDT (1500 GMT), while Brent crude gained 0.7% to $74.51/bbl.