U.S. crude oil stockpiles fell unexpectedly last week, the Energy Information Administration (EIA) said May 8, and strong gasoline demand could point to additional drawdowns in coming weeks as driving season approaches.
Crude inventories fell by 4 million barrels in the week to May 3, compared with analysts' expectations for an increase of 1.2 million barrels.
Net U.S. crude imports fell 432,000 barrels per day (bbl/d) to 4.4 million bbl/d, and crude production edged down 100,000 bbl/d from its record high to 12.2 million bbl/d.
The drawdown in crude stocks came even as refineries cut back output, and 900,000 barrels were added to supply through the release from the U.S. Strategic Petroleum Reserve (SPR). Overall crude inventories, not including the SPR, fell to 466.6 million barrels from their highest levels in 19 months.
Gasoline stocks fell 596,000 barrels, compared with analysts' expectations in a Reuters poll for a 434,000-barrel drop. Demand was strong at 9.9 million bbl/d, near levels associated with later in the summer.
"The market is going to take this as supportive. I do think the draw in crude oil may be the first of many and I think that will be supportive," said Phil Flynn, an analyst at Price Futures Group in Chicago.
Prices rose on the data, with U.S. crude futures up 53 cents to $61.93 per barrel as of 9:53 a.m. CDT (14:53 GMT). Brent crude gained 36 cents to $70.26 a barrel.
Crude stocks at the Cushing, Okla., delivery hub for U.S. crude futures rose by 821,000 barrels, the EIA said.
Refinery crude runs fell by 41,000 bbl/d as utilization rates fell by 0.3 percentage point to 88.9% of total capacity, EIA data showed.
Distillate stockpiles, which include diesel and heating oil, fell by 159,000 barrels, vs. expectations for a 1.1 million-barrel drop, the EIA data showed.
The EIA reported crude inventories rose 9.9 million barrels in the week to April 26 to 470.6 million, compared with analysts' expectations for an increase of 1.5 million barrels.
Insufficient takeaway capacity forces producers to flare or pay others with pipeline space to move it to market.
Crude stocks at the Cushing, Okla., delivery hub for U.S. crude futures rose by 1.8 million barrels to 47.8 million barrels, their highest since December 2017, the EIA data revealed.