Crude oil inventories fell steeply by 8.9 million barrels in the August 11 week to 466.5 million, 4.9 percent below the level a year ago. Gasoline inventories were unchanged from the prior week at 231.1 million barrels, down 2.3 percent year-on-year, while distillates rose 0.7 million barrels to 148.4 million, 3.1 percent below last year at this time. The large crude oil drawdown surprised most analysts, who expected a decline of around 3.6 million barrels, though the American Petroleum Institute, a private industry group, also reported a large weekly drop in crude oil inventories of 9.2 million barrels late Tuesday afternoon. Despite the oversized drawdown, which would normally give a strong lift to WTI crude oil prices, crude oil futures fell by about 30 cents to around $47.45 per barrel immediately following the release of the EIA report.
Crude oil imports were up by 364,000 barrels per day in the week to an average of more than 8.1 million barrels per day. Over the last 4 weeks, imports averaged about 8.0 million barrels per day, 4.7 percent below the same period last year.
Refineries cut back marginally, operating at a still high 96.1 percent of their operable capacity, down 0.2 percentage points from the prior week. Production of gasoline decreased to an average of 10.0 million barrels while distillate production was also slightly lower, averaging 5.3 million barrels per day.
The demand side was steady, with total products supplied over the last 4 weeks averaging 21.2 million barrels per day, up 2.0 percent from the same period last year. But demand for gasoline continued to soften, with supplied gasoline averaging 9.7 million barrels per day, down 0.3 percent from the same period last year as increased fuel efficiency, alternate energy or fuel usage and lower mileage driven per vehicle dampen consumption . In contrast, distillate supplied averaged over 4.3 million barrels per day and was up 15.9 percent year-on-year.
Crude oil prices are under heavy pressure indeed to ignore a nearly 2 percent weekly decline in inventories, apparently overshadowed by a stronger dollar and oversupply concerns that include rising North American oil production, declining production breakeven rates, and expected dampened demand due to the accelerating adoption of electric cars.