EIA: U.S. crude stocks fall on strong refining demand
U.S. crude stocks drew down more than expected on strong refinery runs, while distillate inventories fell thanks to higher truck traffic during the holiday season and cold weather, data from the U.S. Energy Information Administration (EIA) showed on Friday.
Crude inventories fell by 4.2 MMbbl to 416.8 MMbbl in the week ended Dec. 20, the EIA said, compared with analysts' expectations in a Reuters poll for a 1.9-MMbbl draw.
"It's a supportive report. You got good demand from refineries for crude and strong driving," said John Kilduff, partner at Again Capital in New York, cautioning that driving demand was likely to decline after the holiday season.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 320,000 bbl in the week to 22.7 MMbbl, the EIA said, the lowest level since October 2023.
Tank storage of below 20 MMbbl, or between 10% and 20% of Cushing's about 98 MMbbl of capacity, is considered close to operational low, say traders.
Crude stocks typically tend to draw down in December as companies look to dodge a hefty year-end tax bill, and refill in January.
Stocks of crude oil along the U.S. Gulf Coast, the key refining region, fell to 231.5 MMbbl last week, its lowest since Sept. 2023, according to the data.
Refinery crude runs rose by 205,000 bpd, while utilization rates rose by 0.7% to 92.5% in the week, the EIA said.
Brent and U.S. crude futures extended gains after the report. Brent crude futures rose 92 cents, or 1.3%, to $74.18 per barrel. U.S. West Texas Intermediate crude futures rose $1, or 1.4%, to $70.62 per barrel.
U.S. gasoline stocks rose by 1.6 MMbbl in the week to 223.7 MMbbl, the EIA said, on the back of strong refinery processing. Analysts had expected a 1.1-MMbbl draw in a Reuters poll.
Product supplied of gasoline, a proxy for demand, rose to just over 9 MMbpd.
"It was a seasonally strong gasoline demand number, that was supportive of prices, for sure, and the uptick in refinery utilization as well," Kilduff said.
Distillate stockpiles, which include diesel and heating oil, fell by 1.7 MMbbl in the week to 116.5 MMbbl, versus expectations for a 313,000-bbl drop, the EIA data showed.
Net U.S. crude imports rose last week by 995,000 bpd, the EIA said.
Gasoline futures rose 0.6% after the data to trade at $1.96 per gallon, while heating oil futures edged up marginally to $2.25 per gallon.
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