U.S. crude down on strong refining demand, EIA says
U.S. crude stocks drew down more than expected on strong refinery runs, while distillate inventories fell thanks to higher truck traffic during the holiday season and cold weather, data from the Energy Information Administration showed on Friday.
Crude inventories fell by 4.2 million barrels to 416.8 million barrels in the week ended Dec. 20, the EIA said, compared with analysts’ expectations in a Reuters poll for a 1.9 million-barrel draw.
“It’s a supportive report. You got good demand from refineries for crude and strong driving,” said John Kilduff, partner at Again Capital in New York, cautioning that driving demand was likely to decline after the holiday season.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 320,000 barrels in the week to 22.7 million barrels, the EIA said, the lowest level since October 2023.
Tank storage of below 20 million barrels, or between 10 per cent and 20 per cent of Cushing’s about 98 million barrels of capacity, is considered close to operational low, say traders.
Crude stocks typically tend to draw down in December as companies look to dodge a hefty year-end tax bill, and refill in January.
Stocks of crude oil along the U.S. Gulf Coast, the key refining region, fell to 231.5 million barrels last week, its lowest since Sept. 2023, according to the data.
Refinery crude runs rose by 205,000 barrels per day, while utilization rates rose by 0.7 percentage points to 92.5 per cent in the week, EIA said.
Brent and U.S. crude futures extended gains after the report.
Brent crude futures rose 92 cents, or 1.3 per cent, to $74.18 per barrel by 1:54 p.m. ET (1854 GMT). U.S. West Texas Intermediate crude futures rose $1, or 1.4 per cent, to $70.62 per barrel.
U.S. gasoline stocks rose by 1.6 million barrels in the week to 223.7 million barrels, the EIA said, on the back of strong refinery processing. Analysts had expected a 1.1 million-barrel draw in a Reuters poll.
Product supplied of gasoline, a proxy for demand, rose to just over 9 million barrels per day.
“It was a seasonally strong gasoline demand number, that was supportive of prices, for sure, and the uptick in refinery utilization as well,” Kilduff said.
Distillate stockpiles, which include diesel and heating oil, fell by 1.7 million barrels in the week to 116.5 million barrels, versus expectations for a 313,000-barrel drop, the EIA data showed.
Net U.S. crude imports rose last week by 995,000 barrels per day, EIA said.
Gasoline futures rose 0.6 per cent after the data to trade at $1.96 per gallon, while heating oil futures edged up marginally to $2.25 per gallon.
This article was first reported by Reuters
