August 29, 2018 / 2:39 PM / 23 days ago

U.S. crude stockpiles drop more than expected in week - EIA

NEW YORK (Reuters) - U.S. crude stocks fell more than forecast last week, while gasoline and distillate inventories dropped unexpectedly, 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, March 24, 2016. REUTERS/Nick Oxford/File Photo

Oil futures extended gains immediately after the EIA report, which quelled fears of a build in crude stocks that was suggested in a preliminary report on Tuesday from industry group the American Petroleum Institute.

U.S. crude futures traded 70 cents a barrel higher at $69.23 by 11:36 a.m. EDT [1536 GMT], and global benchmark Brent crude was up 46 cents at $76.41 a barrel.

Crude inventories fell by 2.6 million barrels in the week to Aug. 24, compared with analysts’ expectations for a decrease of 686,000 barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 58,000 barrels, EIA said.

U.S. East Coast crude oil inventories fell 2.8 million barrels last week to 11.6 million barrels, the lowest since mid-January.

Products, in particular, drew attention, said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker.

“Strong readings in both distillate and gasoline demand figures show up in this week’s report,” he said.

Refinery crude runs fell by 326,000 barrels per day, EIA data showed. Refinery utilization rates fell by 1.8 percentage points.

Gasoline stocks fell by 1.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 370,000-barrel gain.

Distillate stockpiles, which include diesel and heating oil, fell by 837,000 barrels, versus expectations for a 1.6 million-barrel increase, the EIA data showed.

“Distillate demand, which had been lagging year ago levels noticeably, really closed that gap and now lags 2017 levels by only 1.5%,” Thompson said. “This, combined with a pull back in refinery utilization with give a bullish boost to the price action.”

One outlier was the U.S. Midwest, where distillate stocks rose 182,000 barrels to 32.8 million barrels, the highest since July 2017, the data showed.

Net U.S. crude imports fell last week by 657,000 bpd.

Additional reporting by Devika Krishna Kumar in New York. Editing by Marguerita Choy and David Gregorio

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