By David Gaffen
– U.S. crude stocks fell unexpectedly last week as refineries, enjoying strong margins due to higher fuel prices, ramped up output ahead of the winter heating season, the Energy Information Administration said on Wednesday.
Crude inventories fell by 2.1 million barrels in the week to Nov. 12, compared with analysts’ expectations for an increase of 1.4 million barrels. That came even though the United States released more than 3 million barrels of crude from its strategic reserve for the second consecutive week as the Biden Administration sought ways to reduce overall fuel costs.
Refiners started to process more crude barrels and exports increased in the most recent week, suggesting generally strong demand for U.S. oil.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 216,000 barrels, EIA said, the first time in several weeks that Cushing stocks have increased.
“We have our first storage build in Cushing in six weeks. Sliding storage is enough to rally crude oil to the moon. But that’s not going to be the case, we are safe for now,” said Robert Yawger, director of energy futures at Mizuho.
Refinery crude runs rose by 31,000 barrels per day, as refinery utilization rates rose by 1.2 percentage points to 87.9% of total capacity.
Gasoline stocks fell by 708,000 barrels, compared with expectations for a 575,000-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 824,000 barrels, the EIA data showed.
Net U.S. crude imports fell last week by 490,000 barrels per day as exports increased, with overall exports rising to 3.6 million bpd.
Oil prices fell, with U.S. crude down $1.23, or 1.5%, to $79.53 a barrel while Brent dropped 89 cents, or 1.1%, to $81.55 a barrel as of 10:55 a.m. EST (1555 GMT).
(Reporting By David Gaffen; additional reporting by Laura Sanicola and Stephanie Kelly; Editing by David Gregorio)