U.S. crude stocks dropped more than expected last week, while gasoline and distillate inventories also fell sharply, data from the Energy Information Administration (EIA) showed on July 19.
Crude inventories fell by 4.7 million barrels (bbl) in the week to July 14, compared with analysts' expectations for a decrease of 3.2 million bbl.
Gasoline stocks fell by 4.4 million bbl, the fifth straight week of declines. The draw was far greater than analysts' expectations in a Reuters poll for a 655,000-bbl drop, and lowered U.S. gasoline inventories to 231 million bbl.
"The report was squarely supportive with the across-the-board inventory declines," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
The draw helped boost the price of gasoline, with RBOB futures rising 1.8% to $1.6076 a gallon. Margins also rose, with the gasoline crack spread up 4.2 percent to $20.74/bbl, from $20.36 prior to the report.
Crude prices were slightly higher after the data release.
U.S. West Texas Intermediate futures rose 44 cents, or 1%, to $46.84/bbl as of 9:59 a.m. CDT (14:59 GMT), compared with $46.70/bbl prior to the release. Brent crude rose to $49.36/bbl, up 1.1%, from $49.22 before the news.
Oil prices have weakened since March, as investors have grown frustrated with high global inventory levels despite efforts by OPEC and others to reduce supply.
OPEC and non-OPEC members agreed to maintain supply cuts of 1.8 million bbl/d through March 2018, but those cuts were offset by rising production in OPEC members Nigeria and Libya, who are exempt from the deal, as well as in the U.S.
U.S. production rose again, reaching 9.43 million bbl/d, which "increases pressure on OPEC to come up with some counteracting measures. Otherwise, the rebalancing of the oil market will remain painfully slow," said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.
Refinery crude runs fell by 125,000 bbl/d, EIA data showed. Refinery utilization rates fell by 0.5 percentage point.
Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million bbl, vs. expectations for a 1.2 million bbl increase, the EIA data showed.
U.S. crude imports rose last week by 576,000 bbl/d.
Crude stocks at the Cushing, Okla., delivery hub fell by 23,000 bbl, the EIA said.
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