Crude oil inventories fell 3.3 million barrels in the August 18 week to 463.2 million, 6.0 percent below the level a year ago. Gasoline inventories were down 1.2 million from the prior week at 229.9 million, down 1.2 percent year-on-year, while distillates remained unchanged on the week at 148.4 million, 3.2 percent below the level a year ago. Following the prior week's oversized 8.9 million crude oil decline, the smaller drawdown reported today was in line with expectations and only slightly smaller than yesterday afternoon's report from the American Petroleum Institute (API), a private industry group, indicating a drawdown of 3.6 million barrels for the week. The gasoline inventories decline reported by the EIA did surprise some market participants expecting an increase in gasoline similar to the 1.4 million barrel rise shown in the API report yesterday.
Crude oil imports rose sharply in the week, increasing by 664,000 barrels per day in the week to an average of 8.8 million barrels per day. But crude oil imports are still down year-on-year, with the 8.2 million barrels imported per day on average over the last 4 weeks coming in 3.1 percent below the level a year ago during this period.
Refineries operated at 95.4 percent of their operating capacity during the week, down from 96.1 percent in the prior week. But gasoline production increased in the week, averaging 10.6 million barrels per day, while distillate production did decline, averaging 5.1 million barrels per day.
The demand side was steady, with total product supplied over the last 4 weeks averaging 21.0 million barrels per day, up 1.4 percent from the same period last year. Softness in the demand for gasoline continued, with supplied gasoline averaging 9.7 million barrels per day, down 0.4 percent from the same period last year, as increased fuel efficiency, alternate energy usage and lower mileage driven per vehicle continue to dampen consumption. Distillate fuel product supplied eased slightly to an average of 4.2 million barrels per day but, in sharp contrast to gasoline, this was still 14.4 percent higher than in the same period last year.
Today's report supports the slightly improved market balance of the oil market, where long-term oversupply concerns raised by increased domestic production, growing rig counts and stagnant demand have been dampened by a lengthy series of sizeable weekly inventory drawdowns and most recently, probably in reaction to low oil prices, the first rig count declines in a long time. Crude oil futures rose about 30 cents to around $48.05 per barrel immediately following the release of the EIA report.