U.S. crude oil stockpiles fell more than expected last week as refineries hiked output, but gasoline and distillate inventories posted surprisingly large builds, the Energy Information Administration (EIA) said Dec. 6.
Crude inventories fell 5.6 million barrels (bbl) in the week to Dec. 1, compared with analysts' expectations for a decrease of 3.4 million bbl. At 448.1 million bbl, crude stocks, not including the strategic petroleum reserve, were at their lowest since October 2015.
Oil prices initially rose on the data before pulling back, as traders also reacted to rising U.S. crude production and strong builds in gasoline and distillate stocks.
"Demand for gasoline is curiously weak. And these weeks towards the end of the shopping period normally rival the summertime. So the report overall was bearish," said John Kilduff, partner at Again Capital in New York.
Gasoline stocks rose 6.8 million bbl, much more than with analysts' expectations in a Reuters poll for a 1.7 million-bbl gain.
Crude production continued to inch up to hit another weekly record, rising 25,000 bbl/d to 9.71 million bbl/d, though that figure is still shy of monthly figures that show the U.S. produced more than 10 million bbl/d in the early 1970s.
U.S. West Texas Intermediate crude futures were down 1.5%, or 88 cents, at $56.74/bbl as of 9:46 a.m. CST (15:46 GMT), while Brent dropped 80 cents, or 1.3%, to $62.06/bbl.
Crude stocks at the Cushing, Okla., delivery hub for U.S. crude futures fell 2.8 million bbl, the EIA said. Those figures have been affected by the shutdown of the Keystone pipeline after a 5,000-bbl leak in South Dakota in mid-November. That line reopened on Nov. 28, so this report captures a period where the line was still largely closed.
Distillate stockpiles, which include diesel and heating oil, rose 1.7 million bbl, vs. expectations for a 1 million-bbl increase, EIA data showed.
Refinery crude runs rose 192,000 bbl/d, EIA data showed. Refinery utilization rates rose by 1.2 percentage points to 93.8 of total capacity.
U.S. crude imports fell last week by 73,000 bbl/d.