U.S. oil inventories fell across the board last week, the Energy Information Administration said on Wednesday, drawing down more than expected and with crude oil stockpiles hitting their lowest level in nearly 2-1/2 years.
Crude stocks dropped by 4.5 million barrels to 413 million barrels in the week ended Sept. 20, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.4 million-barrel draw.
U.S. crude inventories, excluding those in the Strategic Petroleum Reserve, were at their lowest last week since April 2022.
Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose by 116,000 barrels, marking their first increase since the beginning of August, the EIA said.
“Even oil bears acknowledge that the market is currently under supplied,” said Josh Young, chief investment officer for Bison Interests. He warned there is still strong sentiment in the market that stocks will be over supplied next year.
Oil futures pared losses following the report. Brent crude was at $74.82 a barrel, down roughly 35 cents by 11:06 a.m. EDT (1506 GMT), while U.S. West Texas Intermediate crude was off 49 cents to $71.06 a barrel.
Refinery crude runs fell by 124,000 barrels per day, while utilization rates dropped by 1.2 percentage points to 90.9% of total capacity.
Gasoline stocks fell by 1.5 million barrels in the week to 220.1 million barrels, the EIA said, compared with expectations for a 21,000-barrel draw.
Distillate stockpiles, which include diesel and heating oil, fell by 2.2 million barrels in the week to 122.9 million barrels, more than expectations for a 1.6 million-barrel drop, the EIA data showed.
Distillate inventories on the U.S. Gulf Coast declined by the most last week since September 2021.
“The trend of falling supplies is getting too big to ignore. We hear how bad demand can be and have mixed signals” said Phil Flynn, an analyst with Price Futures Group. “The weakness of demand doesn’t fit with this falling inventory situation,” he added.
Net U.S. crude imports rose last week by 826,000 barrels per day, EIA said, while exports declined by 692,000 bpd to 3.9 million bpd.
(Reporting by Liz Hampton in Denver; Editing by Marguerita Choy)