Featured # Markets | 3 years ago

U.S. Crude Stockpiles Drop for Fist Time in Six Weeks

Last week United States crude stockpiles surprisingly dropped last week for the first time since March as imports eased, U.S. government data displayed on Wednesday following a wildfire disrupted production in Canada, the top resource of the U.S. oil imports. Gas and distillate inventories also fell more than anticipated, as refining rates eased, data from the Energy Information Administration displayed. Next, crude inventories dropped 3.4 million barrels last week, in comparison with analysts’ forecasts for a gain of 714,000 barrels, as imports dropped 5,000 bpd, the EIA stated. “The report has been quickly viewed as bullish with the crude draw just about exactly opposite to what API had: a 3.4 million-barrel build,” stated Dominick Chirichella, senior partner at the Energy Management Institute in New York, mentioning to the American Petroleum Institute data released Tuesday.

Crude inventories dropped in all regions for the exception for the Cushing Oklahoma, delivers hub for crude futures, which gained 1.5 million barrels to a new record at 67.8 million barrels, the EIA stated. The markets kept their gains following the data, with U.S. crude futures increasing $1.03, or 2.3%, to $45.69 a barrel and Brent crude futures gained $1.31, or 2.9%, at $46.83. “Cushing inventories did rise, taking away some of the strength of the headline drawdown figure,” quoted John Kilduff, partner at hedge fund Again Capital. “The refinery utilization rate, slightly below, at 90 percent is not all that supportive for crude oil demand, and crude oil imports were not that strong again,” he noted.

Refinery crude runs increased 193,000 bpd as refinery utilization rates retreated by 0.6-percentage point to 89.1 percent of total capacity. Gas stocks dropped 1.2 million barrels, in comparison with analysts’ predictions for a 710,000 barrel- decline. U.S. gasoline crack advances, a measure of refiners’ profits, hiked by nearly 4 percent after the EIA data showed the larger-than-expected draw. Distillate stockpiles, which include diesel and heating oil, eased 1.6 million barrels, versus expectations for a 1 million-barrel drop, the data reported.

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