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U.S. crude stocks fell modestly in the most recent week, the government said on Wednesday, as refiners picked up the pace of activity, boosting overall capacity use to the highest levels since before the pandemic.

Crude inventories fell by 1 million barrels in the week to May 20 to 419.8 million barrels, not far from analysts’ expectations in a Reuters poll for a 737,000-barrel drop, the U.S. Energy Information Administration said.

Refiners boosted overall utilization rates by 1.4 percentage points to 93.2% - highest since December 2019, on a 334,000 bpd-increase in crude runs.

Refining capacity overall has slipped since before the pandemic due to a number of closures, and that has pushed the profit margins on making gasoline and diesel to very high levels. Executives on earnings calls in recent weeks have said they were trying to keep up with demand, which has been bolstered by strong buying overseas.

Oil edges higher on tight supply, surge in U.S. refining activity

“Refining activity is finally responding to strong refining margins, low product inventories and an impending ramp-up in demand as we formally enter summer driving season this weekend,” said Matt Smith, lead oil analyst for the Americas at Kpler.

Product exports rose to 6.2 million bpd in the most recent week, and have remained strong as buyers in Europe and Latin America scramble for supply with Moscow under sanctions after invading Ukraine in February.

U.S. gasoline stocks fell by 482,000 barrels in the week to 219.7 million barrels, the EIA said, compared with expectations for a 634,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose by 1.7 million barrels in the week to 106.9 million barrels, versus expectations for a 917,000-barrel rise, the EIA data showed.

Net U.S. crude imports fell last week by 903,000 barrels per day, EIA said as exports rose to their highest since March 2020 at 4.3 million bpd.

Brent crude rose 38 cents to $113.94 a barrel while U.S. crude rose 33 cents to $110.11 a barrel as of 10:59 a.m. EDT.

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