U.S. crude oil inventories fell for the seventh consecutive week in their largest drawdown in nearly a year while exports and production continued to rise, the Energy Information Administration (EIA) said Aug. 16.
Crude inventories fell 8.95 million barrels (bbl) in the week to Aug. 11, nearly three times analysts' expectations for a decrease of 3.1 million bbl and the largest draw in since the week to Sept. 2.
At 466.5 million bbl, crude stockpiles were at their lowest since January 2016. Including emergency reserves, crude stocks were at 1.15 billion bbl, the lowest levels since October 2015, according to EIA data.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose 678,000 bbl, the EIA said.
The report also had bearish elements, as 2.5 million bbl of the draw was on the West Coast, somewhat limiting the market impact of the drop, said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.
After the data, crude futures extended gains but then turned negative, with West Texas Intermediate (WTI) crude futures fell 22 cents to $47.33/bbl by 10:25 a.m. CDT (15:25 GMT), after rising to $47.99. Brent crude futures were unchanged at $50.80/bbl, after trading as high as $51.40 earlier in the session.
U.S. refinery crude runs fell by 9,000 bbl/d, as utilization rates slipped by 0.2 percentage point from 12-year highs to 96.1% of total capacity, EIA data showed.
Gasoline stocks were unchanged, compared with analysts' expectations in a Reuters poll for a 1.1 million-bbl drop.
Distillate stockpiles, which include diesel and heating oil, rose 702,000 bbl, vs. expectations for a drop of 572,000 bbl, the EIA data showed.
U.S. crude imports rose last week by 194,000 bbl/d.
U.S. crude production rose to 9.5 million bbl/d from 9.4 million bbl/d in the previous week. Crude oil exports also rose, jumping to 877,000 bbl/d from 707,000 bbl/d.
U.S. crude production has been closely watched by OPEC and other producers that have tried to stem a global supply glut.
OPEC together with non-OPEC producers including Russia have pledged to restrict output by 1.8 bbl/d between January this year and March 2018.
U.S. output has filled part of that gap.
"The rise in crude production continues to happen," said Gene McGillian, director of market research at Tradition Energy. While nearly 70 million bbl of inventory decreases have been reported this summer, the market is waiting for a signal after the Labor Day holiday, when demand usually tapers, he said.
"If we see these draws past Labor Day, it will drive the market, possibly past $50," he said.
Recommended Reading
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
Oceaneering Won $200MM in Manufactured Products Contracts in Q4 2023
2024-02-05 - The revenues from Oceaneering International’s manufactured products contracts range in value from less than $10 million to greater than $100 million.
E&P Highlights: Feb. 5, 2024
2024-02-05 - Here’s a roundup of the latest E&P headlines, including an update on Enauta’s Atlanta Phase 1 project.
CNOOC’s Suizhong 36-1/Luda 5-2 Starts Production Offshore China
2024-02-05 - CNOOC plans 118 development wells in the shallow water project in the Bohai Sea — the largest secondary development and adjustment project offshore China.