US commercial crude stocks and the country’s strategic reserves both fell in the most recent week as refiners ramped up output amid global supply tightness, the Energy Information Administration said on Wednesday.
Crude inventories fell by 3.4 million barrels in the week to March 25 to 410 million barrels, lowest since September 2018. The decline was much steeper than the 1 million-barrel drop that analysts had forecast in a Reuters poll.
The nation’s strategic reserve also dropped by 3 million barrels following announced sales meant to shore up worldwide supplies since Russia’s invasion of Ukraine. Oil prices have surged as buyers have shunned oil from Russia, the second-largest crude exporter behind Saudi Arabia.
Refineries bumped up crude processing by 35,000 barrels per day in the latest week, lifting overall utilization by 1% to 92.1%. US Gulf refinery processing rates rose to 95.6%, highest since just before the coronavirus pandemic started in January 2020.
Oil jumps 4% on tight supply, prospects of new Russia sanctions
US production rose modestly to 11.7 million bpd, the first increase in output in two months. World oil supplies have been tightening, with more crude coming out of storage, as output has lagged rising demand.
Fuel inventories rose, as implied demand, based on product supplied figures, dropped across the board. Distillate product supplied fell by 16% in the latest week, though the data is volatile.
“Distillate product supplied has decreased quite a bit, and we can see high prices impacting demand,” said Tony Headrick, energy market analyst at CHS Hedging.
US gasoline stocks rose by 785,000 barrels in the week to 238.8 million barrels; analysts had expected a 1.7 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, rose by 1.4 million barrels in the week to 113.5 million barrels.
Crude futures were higher on the day. Brent gained $4.15, or 3.8%, to $114.38 a barrel while US crude rose $4.03, or 3.9%, to $108.27 as of 11:10 a.m. EDT.
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