Crude oil inventories fell by a smaller than expected 0.9 million barrels in the April 28 week to 527.8 million, the fourth consecutive drawdown which narrowed the gain on the year ago level by 0.7 percentage points to 3.1 percent. Product inventories were mixed, with gasoline up 0.2 million barrels to 241.2 million, down 0.2 percent from last year, while distillates fell 0.6 million barrels to 150.4 million, 4.2 percent below last year at this time. Most analysts expected a drop in crude oil inventories twice as large based on Tuesday's American Petroleum Institute report estimating a 4.16 million barrel decline for the week. WTI crude oil futures fell about 60 cents to $47.30 per barrel immediately following the release of the report, extending the sell-off from April highs to about 6 dollars per barrel.
Crude oil imports fell in the week, averaging 8.3 million barrel per day, down 0.648 million from prior week's average. The decline put the 4 week average at 8.2 million barrels per day, 4.9 percent above the year level.
Refineries pulled back production to 93.3 percent of the operable capacity, a 1.1 percentage decline from the previous week. Gasoline production nevertheless slightly increased, averaging 9.8 million barrels per day, as did the production distillates, which rose to an average of 5.1 million barrels per day.
Demand marginally improved after weakness in prior weeks, with total product supplied averaging 19.6 million barrels per day, but the decline from last year increased by 0.2 percentage points to 2.4 percent. Supplied gasoline averaged 9.2 million barrels per day, increasing the drop versus last year by 0.9 percentage points to 2.7 percent as long term trends in fuel efficiency improvement and miles per vehicle driven continue to soften demand. Distillate fuel product supplied, which had seen very robust demand in prior months, now averages 4.2 million barrels per day, up just 3.3 percent from the year ago level, a sharp slowdown from the 15 percent plus gains seen earlier this year. The general weakness in demand and the increased domestic production anticipated from new shale oil production coming on board probably indicates increases in future crude oil inventory levels and lower crude oil prices ahead.