Crude oil inventories fell 1.7 million barrels in the June 9 week to 511.5 million barrels, 2.1 percent above the year ago level. But product inventories increased, with gasoline up 2.1 million barrels to 242.4 million, 2.3 percent above the level last year, while distillates rose 0.3 million barrels to 151.4 million, 0.5 percent below the level last year. The crude oil drawdown was within the range of analysts' forecasts, though a report from API, an industry group, reported a weekly increase of 2.75 million barrels on Tuesday afternoon. The build in gasoline came as a surprise and reignited prevailing concerns about large U.S. inventories, however, and WTI prices plunged about $1.00 to around $45 dollars per barrel immediately following the release of the EIA report.
Crude oil imports fell 316,000 barrels per day in the week to an average of 8.0 million barrels per day. But
imports over the last four weeks averaged 8.2 million barrels, 7.1 percent above the same period last year.
Refineries operated at 94.4 percent of their operable capacity last week, up fractionally from the prior week though production slightly decreased, averaging 9.8 million barrels per day for gasoline and 5.2 million barrels per day for distillates.
Product demand held steady, with total product supplied over the last 4 week averaging 20.1 million barrels per day, but the year-on-year decrease widened by 0.5 percentage points to a minus 1.2 percent. Motor gasoline supplied averaged 9.5 million barrels per day, also down 1.2 percent from the same period last year, while distillate fuel supplied averaged 4.0 million barrels per day, up 4.1 percent from the year ago level.
While last week's EIA report startled the market with a build amid expectations of a drawdown in crude oil stocks and heightened worries about oversupply, the build in gasoline in this week's report coupled with continuing weakness in demand only accentuates those concerns and increases the downward pressure on the price of crude oil.