U.S. crude stockpiles drop as exports surge to record high
(Reuters) - U.S. crude oil stockpiles fell last week, driven by a surge in exports to an all-time high due to the big discount for U.S. crude when compared with international benchmark Brent.
Crude inventories dropped 4.5 MM barrels to 422.1 MM barrels in the week ended July 22, compared with analysts' expectations in a Reuters poll for a 1 MM-barrel drop, the U.S. Energy Information Administration said on Wednesday.
The decline was in large part the result of a surge in crude exports to a record 4.5 MMbpd in the latest week.
The spread, or arbitrage between Brent and the U.S. West Texas Intermediate crude futures has widened out to more than $9 a barrel, making it more attractive for U.S. companies to sell crude overseas and for international refiners to bear the costs of transport to get the cheaper U.S. oil.
"The arb has only increased so you may actually see us challenge 5 million barrels in coming reports," said Robert Yawger, executive director of energy futures at Mizuho.
U.S. crude production rebounded to 12.1 MMbpd after two weeks of declines, rising 200,000 bpd in its biggest increase since December.
U.S. gasoline stocks fell by 3.3 MM barrels on the week. After a couple of weeks of lackluster demand, gasoline product supplied by refiners rebounded, though overall gasoline demand is down 7% over the last four weeks when compared with the year-ago period.
Distillate stockpiles, which include diesel and heating oil, fell by 784,000 barrels.
Refinery crude runs fell by 292,000 bpd in the last week, EIA said. Refinery utilization rates fell by 1.5 percentage points in the week to 92.2%.
Oil prices rose on the news. U.S. crude was up 2.4% to $97.27 a barrel by 11:09 a.m. ET (1609 GMT) while Brent gained 2.1% to $106.62 a barrel.
(Reporting By David Gaffen Editing by Marguerita Choy)
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