U.S. crude oil stockpiles fell by nearly 10 million barrels last week to their lowest since March 2020, the Energy Information Administration (EIA) said on Jan. 27.
The unexpected 9.9 million-barrel fall, the biggest draw since July, reduced crude inventories to 476.7 million barrels, according to EIA figures. Analysts’ expectations in a Reuters poll were for a 430,000-barrel rise.
The decline was the result of a sharp falloff in imports and a 2.3 million-barrel drawdown in stocks at the Cushing delivery hub for crude futures in Oklahoma.
Net U.S. crude imports fell by 2.1 million bbl/d, the EIA said.
Prices rose on the news, with WTI up 35 cents, or 0.7%, to $52.95/bbl, while Brent gained 0.5% to $56.20/bbl by 10:44 a.m. EST (1544 GMT).
“Today’s inventory numbers are a big draw in crude and that should support us. Gasoline demand dipped a little bit so that was disappointing,” said Phil Flynn, senior analyst at Price Futures Group.
Refinery crude runs fell by 39,000 bbl/d, while refinery utilization rates fell by 0.8 percentage points last week, the EIA said.
U.S. gasoline stocks rose by 2.5 million barrels to 247.7 million barrels, the EIA said, compared with expectations for a 1.8 million-barrel rise.
Distillate stockpiles, which include diesel and heating oil, fell by 815,000 barrels in the week, versus expectations for a 361,000-barrel drop.
Shares of North Dakota oil producers Oasis Petroleum, Continental Resources and Enerplus were trading higher after the U.S. Army Corps of Engineers said it would allow the Dakota Access pipeline to run.
While U.S. natural gas demand was mostly flat in 2020, Mexico’s grew. And it came from Texas. The outlook is that Mexico will be ordering more, including from the Eagle Ford’s underdeveloped gas fairway.
The loss of demand for Permian Basin crude oil collided with the completion of an aggressive campaign to build pipelines, but the story of natural gas balance in the region is unfolding nicely.