US fuel inventories tumble as refiners cut rates

NEW YORK, May 11 (Reuters) -- US crude stockpiles fell unexpectedly last week for the first time since March as imports slipped, US government data showed on Wednesday, after a wildfire curtailed production in Canada, the top source of US oil imports.

Gasoline and distillate inventories also dropped more than expected, as refining rates fell, data from the Energy Information Administration (EIA) showed.

Crude inventories fell 3.4 MMbbl in the week to May 6, compared with analysts' expectations for an increase of 714,000 bbl, as imports fell 5,000 bpd, the EIA said.

"The report has been quickly viewed as bullish with the crude draw just about exactly opposite to what API had: a 3.4 million-barrel build," said Dominick Chirichella, senior partner at the Energy Management Institute in New York, referring to the American Petroleum Institute (API) data released late Tuesday.

Crude inventories fell in all regions except for the Cushing, Oklahoma, delivery hub for crude futures, which rose 1.5 MMbbl to a new record at 67.8 MMbbl, the EIA said.

The markets extended their gains after the data, with US crude futures rising $1.03, or 2.3%, to $45.69/bbl and Brent crude futures up $1.31, or 2.9%, at $46.83.

"Cushing inventories did rise, taking away some of the strength of the headline drawdown figure," said John Kilduff, partner at New York energy hedge fund Again Capital.

"The refinery utilization rate, slightly below, at 90% is not all that supportive for crude oil demand, and crude oil imports were not that strong again," he added.

Refinery crude runs rose 193,000 bpd as refinery utilization rates fell by 0.6 percentage point to 89.1% of total capacity.

Gasoline stocks fell 1.2 MMbbl, compared with analysts' expectations for a 710,000-bbl drop.

US gasoline crack spreads, a measure of refiners' profits, jumped by nearly 4% after the EIA data showed the larger-than-expected draw.

Distillate stockpiles, which include diesel and heating oil, fell 1.6 MMbbl, versus expectations for a 1-MMbbl drop, the data showed.