U.S. crude oil inventories fell last week as refining activity picked up ahead of the busy summer driving season, even as the United States continued to release barrels from its strategic reserve.
Crude inventories fell by 3.4 million barrels in the week to May 13 to 420.8 million barrels, the Energy Information Administration (EIA) said, compared with analysts forecast in a Reuters poll for a 1.4 million-barrel rise.
The drop came even though the U.S. Strategic Petroleum Reserve (SPR) fell by 5 million barrels to 538 million barrels, its lowest since November 1987.
Refining activity picked up in the most recent week, in response to tight product inventories and near-record exports that have forced diesel and gasoline prices to record levels in the U.S.
“Despite a 5 million-barrel release from the SPR, higher production and stronger imports, stronger refining activity and crude exports have encouraged a draw to inventories,” said Matt Smith, lead oil analyst Americas at Kpler.
Refinery crude runs rose by 239,000 bbl/d last week, boosting the overall refinery utilization rate by 1.8 percentage points to 91.8%. Capacity use on both the East Coast and Gulf Coast are above 95%, putting those facilities close to their highest possible running rates.
Refiners have struggled to boost product stocks in the U.S., as sanctions on Russia have reduced inventories worldwide and sent buyers globally on a scramble for diesel, gasoline and other products.
U.S. gasoline stocks fell by 4.8 million barrels to 220.2 million barrels in a seventh consecutive weekly decline.
Distillate stockpiles, which include diesel and heating oil, rose by 1.2 million barrels in the week, the EIA said.
Net U.S. crude imports fell last week by 342,000 bbl/d while crude production inched up 100,000 bbl/d to 11.9 million bbl/d.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.4 million barrels in the week, the EIA said.
Oil prices dipped following the data. Brent crude was down $1.46/bbl, or 1.3%, to $110.56/bbl by 10:51 a.m. EDT (1451 GMT) while U.S. crude dropped $1.40, or 1.3%, to $111.09/bbl.
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