(Reuters) – U.S. crude oil inventories last week tumbled more than expected to their lowest level since 2015 as exports jumped and stocks at the Cushing hub dropped, the Energy Information Administration said on Wednesday.
Crude inventories fell 6.1 million barrels in the week to July 20, compared with analysts’ expectations for a decrease of 2.3 million barrels. At 404.9 million barrels, inventories, not including the nation’s emergency petroleum reserve, were at their lowest level since February 2015.
“You’re seeing a 6 million draw … so the tightening of the fundamental picture continues,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
Oil futures rebounded after the data, but pared those gains as investors discounted the drawdown as most of it came from the West Coast, which is isolated from the rest of the country’s supply.
U.S. crude was at $68.40 a barrel, down 13 cents by 11 a.m., while Brent crude fell 10 cents to $73.35 a barrel.
It is unclear whether the market will sustain a rally due to concerns about global demand growth and talk of increased supply, McGillian said.
Net U.S. crude imports fell last week by 2.5 million barrels per day, as exports jumped sharply by 1.2 million bpd to 2.7 million bpd, close to its record of 3 million bpd hit in the week to June 22.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, EIA said.
Cushing’s inventories have been dwindling, in part due to an outage at a Syncrude facility in Canada that has reduced the flow of oil into the Oklahoma hub. Inventories at Cushing have fallen to 23.7 million barrels, lowest since November 2014.
Gasoline stocks fell 2.3 million barrels, compared with expectations in a Reuters poll for a 713,000-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell 101,000 barrels, versus expectations for a 207,000-barrel increase, the EIA data showed.
Refinery crude runs rose by 46,000 bpd, EIA data showed. Refinery utilization rates fell by 0.5 percentage point.