U.S. crude stocks down, fuel inventories up as refiners hit the gas -EIA

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Sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant

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June 29 (Reuters) - U.S. crude stocks fell in the latest week but fuel inventories rose, the government said on Wednesday,as refiners picked up activity, while industry production hit its highest in more than two years in response to tight worldwide supply and high prices.

The U.S. oil industry has been trying to boost output, but inventories keep dwindling, with supplies at the Cushing, Oklahoma hub dropping to the lowest since October 2014, the U.S. Energy Information Administration said.

Crude inventories (USOILC=ECI) fell by 2.8 million barrels in the week to June 24, far exceeding analysts' expectations in a Reuters poll for a 569,000-barrel drop. Production rose to 12.1 million bpd, highest since April 2020, though the weekly figures are volatile and considered less reliable than monthly data released on a lagging schedule.

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Crude stocks at the Cushing, Oklahoma, delivery hub (USOICC=ECI) fell by 782,000 barrels in the week, EIA said. That dropped Cushing's inventories to a bare 21.3 million barrels, lowest in eight years, considered something of a warning sign though the industry has hundreds of millions of barrels in storage around the nation.

"People will be chased away from Cushing to other spot basis locations to find allocations," said Robert Yawger, director of energy futures at Mizuho.

Refinery crude runs (USOICR=ECI) rose by 403,000 barrels per day in the last week, EIA said, bumping overall refinery utilization rates (USOIRU=ECI)by 1 percentage point to 95%, highest for this time of year since 2018.

"Refiners are squeezing out every barrel of product that they can. They’re responding to high prices and responding to calls by the Biden administration to produce more. That has helped increase supplies here a little bit," said Phil Flynn, analyst at Price Futures Group in Chicago.

U.S. gasoline stocks (USOILG=ECI) rose by 2.6 million barrels in the week, the EIA said, compared with expectations for a 452,000-barrel drop.​

Distillate stockpiles (USOILD=ECI), which include diesel and heating oil, rose by 2.6 million barrels, the EIA data showed.

Net U.S. crude imports (USOICI=ECI) fell last week by 36,000 barrels per day.

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Reporting By David Gaffen; Editing by David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

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David Gaffen oversees a team writing and reporting on oil and gas throughout North America; he previously worked at The Wall Street Journal and TheStreet.com