US crude oil inventories fell sharply and stockpiles of gasoline and distillates jumped last week as refineries hiked production rates to the highest since November 2015, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories fell 3.6 million barrels in the week to April 21, compared with analyst expectations for a decrease of 1.7 million barrels.
That marks the third straight week of drawdowns in crude stocks, which will help reduce the glut of supply that has kept oil trading in a range between the high-$40s and mid-$50s per barrel.
After the data, US crude futures turned positive and by 11:06 a.m. (1505 GMT), were up 34 cents at $49.90 a barrel while Brent crude was 6 cents firmer at $52.16 a barrel.
“The report was somewhat supportive for prices, due to the overall crude oil inventory drawdown resulting from a further rise in the refinery utilization rate and large upward spike in crude oil exports,” said John Kilduff, a partner at energy hedge fund Again Capital LLC in New York.
Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures fell 1.2 million barrels, EIA said.
As seasonal maintenance has ended, refiners ramped up production ahead of the high-demand driving season.
Refinery crude runs rose by 347,000 barrels per day (bpd) and utilization rates rose by 1.2 percentage points to 94.1 percent of total capacity, the highest since November 2015, EIA data showed.
Consumption, however, was a concern as total product demand over past four weeks at 19.5 million bpd was off 2.2 percent from a year ago.
“Demand for refined products remains weak for this time of the year, which will be a cause for concern over the coming weeks if demand fails to recover,” said Abhishek Kumar, a senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
Gasoline stocks rose 3.4 million barrels, compared with expectations in a Reuters poll for a 1 million-barrel drop. US inventories of gasoline have rebounded in the last two weeks of figures, putting them about on a par with 2016’s levels at this time, which is seasonally high.
Distillate stockpiles, which include diesel and heating oil, rose 2.7 million barrels, versus expectations for a 1 million-barrel drop, the EIA data showed.
US crude imports rose last week by 515,000 bpd to 7.8 million bpd as exports increased 587,000 bpd to 1.2 million bpd.

Source: Arab News