U.S. crude oil, gasoline stocks fall sharply: EIA

(Reuters) - U.S. crude stocks fell sharply last week due to strong refining activity and an increase in exports, while gasoline and distillate inventories also dropped more than expected, the Energy Information Administration said on Wednesday.

FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, in Cushing, Oklahoma, U.S., in this March 24, 2016. REUTERS/Nick Oxford/File Photo

Crude inventories fell by 7.2 million barrels in the week to July 21, a far deeper draw than the decrease of 2.6 million barrels analysts had forecast.

That brought U.S. inventories down to 483.4 million barrels, still well above the five-year average but down nearly 10 percent from their peak in late March. Oil futures rallied on the EIA report and then retraced some gains, with Brent remaining above $50 a barrel.

Gasoline stocks fell by 1 million barrels, compared with analyst expectations for a 614,000-barrel drop. Gasoline demand is still down 0.3 percent for the past four weeks from the year-ago period.

“Overall, this report gives the bulls some solid fundamentals to build on,” said David Thompson, executive vice president at Powerhouse, an energy-specialized commodities broker in Washington, D.C.

Falling U.S. inventories in recent weeks have helped alleviate some concerns about the global crude glut as Saudi Arabia and Russia, the world’s largest producers of crude, underscored their commitment to reducing crude supply and demanded the same of other producing nations.

U.S. crude futures were up 29 cents to $48.17 a barrel as of 11:03 a.m. EDT (1503 GMT) after hitting a high of $48.87 a barrel, while Brent crude rose 18 cents to $50.40 a barrel, retreating from a session high of $51.06 a barrel.

Analysts have wondered whether the tightening of supplies can be chalked up to seasonal factors or whether prices will continue to rise as the Organization of the Petroleum Exporting Countries continues to limit production.

“Today’s report has strengthened the bullish sentiment already prevailing in the market, although the longevity of the move remains in doubt,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.

Distillate stockpiles, which include diesel and heating oil, fell by 1.9 million barrels, versus expectations for a 453,000-barrel drop, the EIA said.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.7 million barrels, EIA said.

Refinery crude runs rose by 166,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.3 percentage points to 94.3 percent of their capacity.

U.S. crude imports fell last week by 254,000 barrels per day. Exports, meanwhile, surged to more than 1 million bpd.

Reporting By David Gaffen; additional reporting by Scott DiSavino; Editing by David Gregorio