December 28, 2017 / 4:06 PM / a year ago

U.S. crude stocks drop, refiners run near full capacity

(Reuters) - U.S. crude stocks fell more than expected last week as refineries pushed output to its highest rate for this time of year in nearly two decades, the Energy Information Administration said on Thursday.

FILE PHOTO: A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma, U.S., September 15, 2015. REUTERS/Nick Oxford/File Photo

Crude inventories fell by 4.6 million barrels in the week to Dec. 22, compared with analysts’ expectations for a decrease of 4 million barrels.

Refinery crude runs rose by 335,000 barrels per day, EIA data showed. Refinery utilization rates rose by 1.6 percentage points to 95.7 percent, the highest in December since 1998.

A sharp increase in East Coast activity helped boost overall refining use, where refiners are operating at 98.4 percent of capacity, highest on record for this time of year.

Even though production has remained strong in the United States, refiner appetite for crude has helped reduce overall stocks, as they have found steady demand through exports.

Production edged lower in the most recent week, dropping to 9.75 million bpd, down from 9.79 million bpd a week earlier. U.S. production is fast approaching the all-time record of 10.04 million barrels a day, set in late 1970, according to EIA figures.

U.S. crude futures dropped 14 cents to $59.50 as of 11:22 a.m. EST (1622 GMT), while Brent futures were off by 13 cents to $66.31 a barrel.

Gasoline stocks rose by 591,000 barrels, compared with analysts’ expectations in a Reuters poll for a 1.3 million-barrel gain.

Distillate stockpiles, which include diesel and heating oil, rose by 1.1 million barrels, versus expectations for a 584,000-barrel drop, the EIA data showed.

Net U.S. crude imports rose last week by 807,000 barrels per day.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.6 million barrels, EIA said.

Reporting By David Gaffen; Editing by Andrew Hay

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