(Reuters) - U.S. crude stocks fell last week as refiners boosted activity to the highest rate since 2005, while stocks of distillates, which include diesel and jet fuel, rose by the most in a year, the Energy Information Administration said on Thursday.
Crude inventories fell by 7.4 million barrels in the week to Dec. 29, compared with analysts’ expectations for a decrease of 5.1 million barrels.
Refinery activity hit its highest utilization rate since 2005 as refiners kept processing heavy volumes of crude into products, and due in part to year-end tax concerns, analysts said. Crude runs rose by 210,000 barrels per day, EIA data showed. Refinery utilization rates rose by 1 percentage points to 96.7 percent.
“Refineries have the incentive to run down stocks to avoid tax payments, which are based on the level of crude oil stocks at the year-end,” said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.
U.S. crude futures were up 46 cents to $62.08 a barrel, while Brent crude gained 18 cents to $68.02 a barrel, as of 11:23 a.m. EST (1623 GMT).
Distillate stockpiles, which include diesel and heating oil, rose by 8.9 million barrels, versus expectations for a 477,000-barrel increase, the EIA data showed. This was the biggest one-week increase since the last week of 2016.
There have been concerns that the current cold weather would stress already low distillate inventories on the U.S. East Coast during this recent run of colder-than-usual weather, though this figure offsets that. Distillate stocks often rise sharply at the end of the year, with similar one-week jumps seen in 2016 and 2015.
Heating oil futures slumped after the report, but slowly recovered, and were down 0.5 percent to $2.0711 per gallon.
Gasoline stocks rose by 4.8 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.2 million-barrel gain.
Net U.S. crude imports fell last week by 292,000 barrels per day.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.4 million barrels, EIA said.
Additional reporting by Scott DiSavino; Editing by David Gregorio