Crude oil inventories fell 5.7 million barrels in the October 13 week to 456.5 million, 2.6 percent below the level a year ago. But product inventories increased in the week, with gasoline up 0.9 million barrels to 222.3 million, 2.5 percent below the year ago level, and distillates up 0.5 million barrels to 134.5 million, down 13.6 percent year-on-year. The substantial decline in crude oil stocks reported by the EIA was more moderate than the weekly draw of 7.1 million barrels reported to subscribers Tuesday afternoon by the American Petroleum Institute (API), a private industry group. WTI prices, which had firmed earlier to trade above $52.20 per barrel on the back of the bullish API report, fell about 30 cents to $51.90 immediate following the release of today's EIA data.
Refineries operated at 84.5 percent of their operable capacity in the week, down 4.7 percentage points from the prior week, evidently as a result of idled production in the Gulf of Mexico because of Hurricane Nate. Despite this, production of gasoline increased marginally to 10 million barrels per day, while distillates production did fall slightly to 4.8 million barrels per day.
Average daily crude imports fell 134,000 barrels to 7.5 million barrels, putting the 4-week average at 7.4 million barrels per day, 1.9 percent below last year at this time.
The demand side weakened, with total product supplied over the last four weeks averaging 19.9 million barrels per day, down 0.7 percent year-on-year. Motor gasoline supplied during the period averaged 9.3 million barrels per day, up 2.9 percent from the year ago period, while distillate fuel product supplied averaged 3.7 million barrels per day, 6.4 percent below last year's level.
Helped by OPEC production cuts and more recently hurricane disruptions in U.S. oil-producing states, the steady decline in crude oil inventories since April has brought supply-demand closer to equilibrium and lifted prices close to 5-month highs. However, at $50 plus per barrel, shale oil exploration and development activity becomes more lucrative again, increasing production down the road and capping further price increases.