By Sam Boughedda
Investing.com -- U.S. oil stockpiles declined by more than expected in the latest week, the Energy Information Administration said on Wednesday.
Crude inventories dropped by 3.449 million barrels last week, compared with analysts' expectations for a draw of 1.022 million barrels.
Distillate stockpiles, which include diesel and heating oil, rose by 1.394 million barrels in the week against expectations for a draw of 1.550 million barrels, the EIA data showed.
Gasoline inventories rose by 785,000 barrels last week, the EIA said, compared with expectations for a draw of 1.744 barrels.
The drawdown in crude accounted for almost the entire release of 3 million barrels from the U.S. Strategic Petroleum Reserve — suggesting that other sources of demand for crude accounted for less than 500,000 barrels during the week.
SPR outflows have been at around 3.0 million barrels each week as the Biden administration fulfills its pledge of providing refiners with oil from the nation’s emergency reserve instead of the open market to try and tamp down pump prices of fuel, which are near record highs.
Refinery utilization at a multi-week high of 92.1%, suggesting that “refiners are really churning out products like anything for the fear that the market may get caught with short supply later”, said Investing.com analyst Barani Krishnan.
The build in gasoline inventories come as the national average pump price in the United States held at above $4.23 per gallon on Wednesday, just a dime below the March 11 record high of $4.33 reported by the American Automobile Association.
“It’s still early to say conclusively if we’re witnessing demand destruction for gasoline at these prices although anecdotal accounts of the pain being felt by Americans at the pump seem to suggest so,” Krishnan said.
He also pointed out that distillates, the showpiece of demand component for US oil, witnessed its biggest build since the week ended Jan. 7.
Distillates, refined into diesel for trucks, buses, trains and ships as well as fuel for jets, have been the strongest growth component of the US oil complex this year, seeing virtually non-stop inventory declines week after week for the past two months.
On the exports front, there was a drop of nearly a million barrels on a daily basis as shipments of U.S. crude fell to 2.99 million barrels per day during the week from a previous 3.84 million.