US crude oil stockpiles declined unexpectedly last week as output slipped from record highs and refining rates edged up, while gasoline stocks decreased and distillate inventories rose, the Energy Information Administration said on Wednesday.
Crude inventories fell by 3.9 million barrels in the last week, compared with analysts' expectations for an increase of 2.7 million barrels. The biggest decline came from the Gulf Coast, where stockpiles fell by more than 5 million barrels to 222.1 million barrels. Inventories in the East Coast and Midwest regions increased.
Crude stocks at the Cushing, Oklahoma, delivery hub fell 672,000 barrels, their first drawdown in a month, the EIA said. Net US crude imports were steady, just edging 2,000 barrels per day higher, while domestic crude production slipped 100,000 bpd from its record high to 12 million bpd.
Refinery crude runs rose by 30,000 bpd and utilization rates nudged 0.1 percentage point higher to 87.6 percent of total capacity, EIA data showed. "This was your best chance to get an increase in supply because from this point forward, with the refiners starting to slowly come out of maintenance, with OPEC cuts starting to kick in and Venezuelan supplies, you're probably now looking at a future with more draws in the coming weeks," Phil Flynn, analyst at Price Futures Group in Chicago.
The Organization of the Petroleum Exporting Countries and allies have agreed to cut oil output since January in an effort to reduce global supplies and support prices. And this week, Russian news agencies reported Saudi Arabia is proposing that the deal be extended until the year-end.
US sanctions on Venezuela has further tightened markets. Venezuela's worst blackout on record has left most of the country without power for six days, with hospitals struggling to keep equipment running, food rotting in the tropical heat and exports from the main oil terminal were shut down.
Oil prices briefly extended gains after the report before steadying. US crude futures climbed to a four-month high above $58 a barrel after the data was released. Gasoline stocks fell by 4.6 million barrels, nearly double analysts' expectations in a Reuters poll for a 2.5 million barrels drop. Distillate stockpiles, which include diesel and heating oil, rose by 383,000 barrels, versus expectations for a 1.9 million-barrel drop, the EIA data showed.
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