While crude inventories fell by more than 4 million barrels in the last week of August, stocks at the Cushing, Oklahoma hub for U.S. crude futures rose by 549,000 barrels.
The U.S. Energy Information Agency reported the drop in inventories was 4.3 million barrels in the week to Aug. 31, far more than the 1.3 million decline predicted by energy analysts. The EIA said the decline brought stockpiles to 401.49 million barrels of crude which was the lowest level since February 2015.
“The large crude oil inventory drawdown makes for a bullish report, despite the appreciable gains in refined product inventory levels,” John Kilduff, a partner at Again Capital Management in New York told Reuters.
Refiners’ demand for crude oil and drivers’ demand for gasoline remain supportive of the market, with gasoline demand remaining near the highest levels of the season, he said. Still, he cautioned that rising stockpiles at Cushing were somewhat bearish.
U.S. crude futures rose slightly after the data was released, while gasoline futures pared gains owing to the unexpected build.
Refinery crude runs rose by 81,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.3 percentage point to 96.6 percent of total capacity.
Gasoline stocks rose by 1.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 810,000-barrel drop.
Distillate stockpiles, which include diesel and heating oil, rose by 3.1 million barrels, versus expectations for a 742,000-barrel increase, the EIA data showed.
Net U.S. crude imports rose last week by 500,000 bpd.