Crude oil inventories unexpectedly fell 3.6 million barrels in the April 21 week to 528.7 million, the third consecutive weekly drawdown which narrowed the gain on the year ago level by 1.1 percentage points to 3.8 percent. But product inventories, in contrast, were up in the week, with gasoline up 3.4 million barrels to 241.0 million, 0.1 percent below the year ago level, and distillates up 2.7 million barrels to 150.9 million, 4.6 percent below last year at this time. The price of WTI crude oil futures, which has fallen sharply by about 4 dollars in recent sessions, jumped 70 cents higher to around $49.80 per barrel immediately following the release of the report.
Despite the decline in inventories, crude oil imports were up sharply in the week, rising by 1.1 million barrels per day from the prior to week to 8.9 million barrels per day. The increase pushed the 4-week average, at 8.1 million barrels per day, up to a year-on-year gain of 4.9 percent.
Refineries ramped up production to 94.1 percent of their operable capacity, a 1.2 percentage point increase from the prior week. Production of gasoline nevertheless declined, averaging 9.7 million barrels per day, as did the production of distillates, which averaged 5.1 million barrels daily.
The drawdown in crude oil inventories comes surprisingly as the demand side continues to weaken, with total product supplied over the last 4 weeks averaging 19.5 million barrels per day, down 2.2 percent from the same period last year. Of this amount, supplied gasoline averaged 9.2 million barrels per day, 1.8 percent below last year's level, reflecting long term trends of stable or even slightly decreasing mileage driven per vehicle while fuel efficiency continues to improve. The general softness in demand is apparently also beginning to affect distillate fuel supplied, which had seen very robust demand earlier this year with plus 15 percent year-on-year gains, but is now averaging just 4.1 million barrels per day, up 4.5 percent from the same period last year.