Investing.com -- U.S. oil stockpiles fell by more than expected in the latest week, the Energy Information Administration said on Wednesday.
Crude inventories fell 9.9 million barrels last week, compared with analysts' expectations for a build of 430,000 barrels.
"Another huge uptick in U.S. crude exports, along with a big flow out of Cushing and a million-barrels-per-day drop in imports, have combined to bring about this outsized drawdown in crude stocks," said Investing.com analyst Barani Krishnan. "The volatility in the EIA’s weekly releases have really been staggering and there’s just no trend that’s being set here, especially considering that just a week ago, we had a build of more than four million barrels in crude. This is why I’ve been advocating for at least three to four straight weeks of consistency before we can get a proper read on the stockpile and refining situation."
Distillate stockpiles, which include diesel and heating oil, fell 815,000 barrels in the week against expectations for a draw of 361,000 barrels, the EIA data showed.
Refinery crude runs fell 39,000 barrels. The weekly refinery utilization rate was down 0.8%, according to the EIA report.
Gasoline inventories rose 2.47 million barrels last week the EIA said, compared with expectations for a 1.76 million-barrel build.
Krishnan added: "As of last week, it appears that refiners dropped their utilization of operable capacity slightly to 81.7% from the previous week’s 82.5%. So, it looks like the 2 million-barrel draw out of Cushing and exports returning to above 3.3 million bpd from a previous 2.25 million is the bigger driver here, along with the drop in imports. All these make a truly interesting read on the push-and-pull that’s going on as the market continues to adjust forecasts on supply and demand amid the ongoing Covid-19 pandemic. Again, we have gasoline builds resuming higher than expected, with almost 700,000 barrels above forecasts. But distillates surprisingly drew down 500,000 barrels more than thought — which has been rare in this space.”