(Reuters) – U.S. crude oil stockpiles fell more than expected last week, while gasoline and distillate inventories posted surprise builds as refiners ramped up their activity to the highest since January ahead of Memorial Day weekend, the Energy Information Administration said on Thursday.
Crude inventories fell 3.6 million barrels in the week to May 25, compared with analysts’ expectations for a decrease of 525,000 barrels.
The drawdown assuaged some worries from U.S. traders who have watched the West Texas Intermediate crude (WTI) benchmark weaken due to high production levels and signals that OPEC will let its supply-cut pact come to a close.
“The report was supportive due to the large drop in crude oil inventories which was a function of a trifecta of bullish elements: strong demand from refiners, a sizeable drop in crude oil imports, and rebound in exports,” said John Kilduff, a partner at Again Capital LLC in New York.
Refinery crude runs rose 527,000 barrels per day to 17.2 million bpd as utilization rates jumped 2.1 percentage points to 93.9 percent of total capacity, both the highest runs and rates since January, EIA data showed.
Gasoline stocks rose by 534,000 barrels, compared with analysts’ expectations in a Reuters poll for a 1.4 million-barrel drop.
Demand for the motor fuel over the past four weeks rose 0.8 percent year-on-year ahead of the Memorial day weekend which marks the official start to the summer driving season in the United States.
Distillate stockpiles, which include diesel and heating oil, grew by 634,000 barrels, versus expectations for a 1.3 million-barrel draw, the EIA data showed.
After the report, U.S. crude futures were down 57 cents to $67.62 a barrel as of 11:22 a.m. EDT, while Brent crude August futures gained 61 cents to $78.33.
Net U.S. crude imports fell last week by 959,000 bpd as exports jumped 431,000 bpd to 2.2 million bpd.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI fell 556,000 barrels, EIA said.
Crude production continued to set a weekly record high, edging up to 10.8 million bpd, though the weekly U.S. figures are subject to revisions; monthly data for March will be released later on Thursday.