U.S. crude oil stocks fell last week, led by the biggest fall in inventories at the Cushing, Okla., storage hub in eight years, while gasoline and distillate stockpiles rose, the Energy Information Administration (EIA) said Nov. 29.
Crude inventories fell 3.4 million barrels (bbl) in the week to Nov. 24, compared with analysts' expectations in a Reuters poll for a decrease of 2.3 million bbl.
Most of the drop can be attributed to a fall in stocks at the Cushing delivery hub, which was down by 2.9 million bbl, the EIA said.
This was the largest weekly draw at Cushing since September 2009, and analysts attributed the decline to the shutdown of the Keystone crude pipeline on Nov. 16 after a leak of 5,000 bbl of oil in South Dakota.
"The headline crude oil drawdown was supportive, but it was a function of the Keystone pipeline outage, which impacted Cushing inventories," said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
That line, operated by TransCanada Corp. (NYSE: TRP), was reopened on Nov. 28.
Stocks of gasoline and distillates rose more than anticipated. Distillate inventories, which include diesel and heating oil, rose 2.7 million bbl, vs. expectations for a 230,000-bbl increase, the EIA data showed.
Crude futures bounced around on the news, but as of 9:56 a.m. CST (15:56 GMT), oil prices were marginally higher, with U.S. West Texas Intermediate crude at $58.22/bbl, up 23 cents on the day. Brent crude rose 31 cents to $63.92/bbl.
The market also responded positively to news that Kuwait's oil minister said a key committee recommended OPEC extend its supply-cut agreement by nine months.
That had been expected, but there was some concern headed into OPEC's decision, expected Nov. 30, that the agreement might not be extended that long. The committee will grapple with rising U.S. production, which hit 9.68 million bbl/d in the most recent week, a new weekly record.
Gasoline stocks rose 3.6 million bbl, compared with forecasts for a 1.2 million bbl gain.
"The rise in refined product inventories more than offsets the crude oil inventory drop, and there was a notable, if not spectacular, drop in implied gasoline demand on the week," Kilduff said.
Refinery crude runs rose by 165,000 bbl/d, EIA data showed. Refinery utilization rates rose by 1.3 percentage points.
U.S. crude imports fell last week by 365,000 bbl/d.
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