U.S. crude stocks and distillate inventories fell last week, while jet fuel demand rose to a five-year high, the Energy Information Administration (EIA) said on Wednesday.
Gasoline inventories rose, stoking concerns among analysts of weak demand ahead of a major driving holiday in the U.S. later this month.
Crude inventories fell by 2 million barrels to 438.4 million barrels last week, the EIA said, compared with analysts’ expectations in a Reuters poll for a 833,000-barrel draw.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 740,000 barrels, the EIA said.
Crude oil futures extended losses following the report, despite the larger-than-expected draw. Brent futures were down about 52 cents trading at $61.63 a barrel at 10:56 a.m. EDT (1456 GMT), while U.S. West Texas Intermediate futures were trading at $58.69 a barrel, down 40 cents.
Distillate stockpiles, which include diesel and heating oil, fell by 1.1 million barrels in the week to 106.7 million barrels, versus expectations for a 1.3 million-barrel drop, the EIA data showed.
U.S. jet fuel product supplied, a proxy for demand, rose last week to 2.02 million barrels per day, the highest level since December 2019. The four-week average product supplied was also the highest in over five years.
“I would say the continued rise in jet fuel demand suggest the economy is still robust despite concerns of a slowdown,” said Phil Flynn, an analyst with Price Futures Group.
Refinery crude runs fell by 7,000 barrels per day, while utilization rates rose by 0.4 percentage points to 89% in the week, the EIA said.
U.S. gasoline stocks rose by 200,000 barrels in the week to 225.7 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.6 million-barrel draw.
“This is the first bad report for gasoline in a couple of weeks. The refiner had been cranking up the utilization rate. But today in this report it went backwards,” said Bob Yawger, director of energy futures at Mizuho.
“That tells you the refiner is not so hopped up in believing in demand that he’s going to run the refiner really hot,” he added.
Net U.S. crude imports rose last week by 673,000 barrels per day, EIA said.
(Reporting by Liz Hampton in Denver; Editing by Chizu Nomiyama)