U.S. crude stocks fell unexpectedly last week, and gasoline and distillate inventories decreased more than expected, the Energy Information Administration (EIA) said on Oct. 26.
Crude inventories fell by 553,000 barrels (bbl) in the last week, compared with analysts' expectations for an increase of 1.7 MMbbl. Crude stocks at the Cushing, Okla., delivery hub fell by 1.3 MMbbl, EIA said.
West Texas Intermediate crude futures for December delivery were last down 21 cents to $49.75/bbl, or 0.4%, after earlier hitting a session low of $48.87. Brent crude futures for December delivery were down 40 cents to $50.39/bbl, a 0.8% loss.
"It was a supportive report with across-the-board inventory declines, fairly large in gasoline and distillates," said John Kilduff, partner at New York energy hedge fund Again Capital. "Crude oil import volumes remain restrained, with a much smaller-than-expected rebound from the previous week's low levels."
U.S. crude imports rose last week by 133,000 bbl/d.
Refinery crude runs rose by 182,000 bbl/d, EIA data showed. Refinery utilization rates rose by 0.6 percentage points.
Gasoline stocks fell by 2 MMbbl, compared with analysts' expectations in a Reuters poll for a 1 MMbbl drop.
Distillate stockpiles, which include diesel and heating oil, fell by 3.4 MMbbl, vs. expectations for a 1.4 MMbbl drop, the EIA data showed. On the Gulf Coast, distillate stocks fell to their lowest seasonal levels since October 2014.
"Although the draw gives the data a definite bullish tilt, looking deeper into the numbers, we see a rise in U.S. production that's evidence of rigs coming online in the last few months," said Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in New York.
"Spot crude has had a hard time gaining any traction above the $50 level to the upside even though we have see quite a few draws in the last few weeks," he said. Rather, the focus remains on geopolitics and the results of upcoming OPEC negotiations.
Recommended Reading
US Refiners to Face Tighter Heavy Spreads this Summer TPH
2024-04-22 - Tudor, Pickering, Holt and Co. (TPH) expects fairly tight heavy crude discounts in the U.S. this summer and beyond owing to lower imports of Canadian, Mexican and Venezuelan crudes.
Exclusive: Andrew Dittmar Expects Increased Public M&A in 2024
2024-02-15 - In this Hart Energy LIVE Exclusive, Andrew Dittmar, Enverus Intelligence's senior vice president, compares 2023 consolidation to what he expects in 2024, including more public to public deals.
ARC Resources Adds Ex-Chevron Gas Chief to Board, Tallies Divestments
2024-02-11 - Montney Shale producer ARC Resources aims to sign up to 25% of its 1.38 Bcf/d of gas output to long-term LNG contracts for higher-priced sales overseas.
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
Majors Aim to Cycle-proof Oil by Chasing $30 Breakevens
2024-02-14 - Majors are shifting oilfields with favorable break-even points following deeper and more frequent boom cycles in the past decade and also reflects executives' belief that current high prices may not last.