Crude oil inventories fell 2.5 million barrels in the June 16 week to 509.1 million, 1.8 percent above the year ago level. Product inventories were mixed, with gasoline down 0.6 million barrels to 241.9 million, up 1.8 percent from last year at this time, while distillates rose 1.1 million barrels to 152.5 million, up 0.1 percent from the level a year ago. The decline in crude oil was roughly in line with expectations, though the drop in gasoline inventories was somewhat of a surprise to analysts expecting a slight increase, as was the smaller than anticipated rise in distillate inventories. WTI crude oil futures rallied about 30 cents to around $44.15 per barrel immediately following the release of the EIA report, but quickly retreated to pre-release levels.
Crude oil imports fell 149,000 barrels per day in the week to an average of 7.9 million barrels per day. The year-on-year gain in crude oil imports decreased by a sharp 5.1 percentage points to 2.00 percent, with imports over the last four weeks averaging 8.1 million barrels per day.
Refineries operated at 94.0 percent of their operable capacity, a slight decline from the prior week, though gasoline production increased, averaging 10.2 million barrels per day, as did the production of distillates, averaging 5.3 million barrels per day.
Product demand slightly increased, with total products supplied averaging about 20.2 million barrels per day, 0.4 percent below the level during the same period last year. Motor gasoline supplied averaged 9.6 million barrels, down 1.6 percent year-on-year, while distillate supplied averaged 3.9 million barrels, up 4.0 percent from the same period last year.
The week's drawdown in crude oil inventories and the slightly improving demand picture may lend some support to crude oil prices, which have fallen by more than 8 dollars since May 24 amid concerns of oversupply, as OPEC oil output cuts appear insufficient to offset depressed demand and expected U.S. domestic oil production increases.