U.S. crude oil inventories fell for a sixth straight week, as OPEC efforts to reduce supply appear to be coming to fruition ahead of the cartel's upcoming meeting next week, while gasoline and distillate stocks also dropped.
The U.S. Energy Information Administration (EIA) said May 17 that crude inventories fell 1.8 million barrels (MMbbl) for the week to May 12, compared with expectations for a decrease of 2.4 MMbbl.
That boosted oil prices immediately after the data, with West Texas Intermediate crude futures bouncing to a high of $49.50/bbl before retreating modestly. Crude was up 67 cents to $49.32/bbl as of 9:48 a.m. CT (14:48 GMT), though prices are still 8% below April's peak of $53.76/bbl. Brent rose 81 cents to $52.45/bbl.
Traders and investors have grown increasingly concerned about a supply glut several months into the deal between OPEC and non-OPEC members like Russia to clip production by 1.8 MMbbl/d.
Additional supply from other non-OPEC nations, like the U.S., has offset the cuts. In the most recent week, U.S. production slipped 9 Mbbl/d to 9.305 MMbbl/d, the first decline in 13 weeks. The EIA still expects U.S. production to average 9.31 MMbbl/d in 2017.
Crude stocks have been edging lower after hitting a record 535.5 MMbbl at the end of March. Total U.S. inventories now sit at 520.8 MMbbl, a 3% decline.
U.S. crude imports rose 577 Mbbl/d last week, while exports rose 400 Mbbl/d.
Some analysts viewed the drawdown in gasoline stocks as disappointing, as they fell by just 413 Mbbl, compared with expectations in a Reuters poll for a 731Mbbl drop.
"The numbers beneath the surface were rather mixed, with gasoline stocks falling only slightly on weaker demand and sharply higher imports suggesting sufficient availability of crude oil internationally despite OPEC cuts," said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.
Refinery crude runs rose by 363 Mbbl/d as utilization rates rose by 1.9 percentage points to 93.4% of total capacity. U.S. Gulf Coast refinery utilization rose 3.1 percentage points to 96.5%, the highest level since August 2015, EIA data showed
Distillate stockpiles, which include diesel and heating oil, fell 1.9 MMbbl, vs. expectations for a 1.1 MMbbl drop, the EIA data showed.
Crude stocks at the Cushing, Okla., delivery hub rose by 35 Mbbl, EIA said.
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