U.S. crude stocks dropped more than expected last week, while gasoline and distillate inventories also fell sharply, data from the Energy Information Administration showed on Wednesday.
Crude inventories fell by 4.7 million barrels in the week to July 14, compared with analysts’ expectations for a decrease of 3.2 million barrels.
Gasoline stocks fell by 4.4 million barrels, the fifth straight week of declines. The draw was far greater than analysts’ expectations in a Reuters poll for a 655,000-barrel drop, and lowered U.S. gasoline inventories to 231 million barrels.
“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 percent to $1.6076 a gallon. Margins also rose, with the gasoline crack spread up 4.2 percent to $20.74 a barrel, from $20.36 prior to the report.
Crude prices were slightly higher after the data release.
U.S. futures rose 44 cents, or 1 percent, to $46.84 a barrel as of 10:59 a.m. EDT (1459 GMT), compared with $46.70 a barrel prior to the release. Brent crude rose to $49.36 a barrel, up 1.1 percent, 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 the Organization of the Petroleum Exporting Countries and others to reduce supply.
OPEC and non-OPEC members agreed to maintain supply cuts of 1.8 million bpd 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 United States.
U.S. production rose again, reaching 9.43 million barrels a day, 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 barrels per day, 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 barrels, versus expectations for a 1.2 million barrels increase, the EIA data showed.
U.S. crude imports rose last week by 576,000 barrels per day.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 23,000 barrels, EIA said. (Reporting By David Gaffen; additional reporting by Scott DiSavino; Editing by Meredith Mazzilli)