Crude oil inventories surprisingly rose 2.2 million barrels in the November 3 week to 457.1 million, 5.7 percent below the level a year ago. But product inventories fell again, with gasoline down 3.3 million barrels to 209.5 million, 5.2 percent below last year's level, and distillates down 3.4 million barrels to 125.6 million, a year-on-year drop of 15.5 percent. The increase in crude stocks came as a surprise to market participants in light of yesterday's report from the American Petroleum Institute (API), a private industry group, showing a drawdown of around 1.6 million barrels. WTI crude oil prices, which were boosted higher earlier to above $57 per barrel partly on the back of the API report, fell about 30 cents to around $56.50 immediately following the release of the EIA report.
Refineries ramped up operation to 89.6 percent of their operable capacity, up 1.5 percentage points from the prior week. Gasoline production nevertheless slightly decreased to 10.2 million barrels per day, while distillate fuel production did rise, averaging 5.2 million barrels per day.
Crude oil imports fell 194,000 barrels per day in the week to an average of 7.4 million barrels per day, putting the 4-week daily average at 7.6 million barrels, 0.6 percent above the level last year.
The demand side strengthened significantly, with total product supplied over the last four weeks averaging 19.9 million barrels per day, down just 0.8 percent from last year at this time and a 2.6 percentage point improvement from the prior week's reading. Gasoline supplied averaged 9.3 million barrels per day during the period, unchanged from the prior week's average but up 3.0 percent year-on-year, while distillates supplied rose to an average of 3.9 million barrels per day, down only 2.9 percent from last year following the prior week's minus 9.3 percent reading.
Despite the mostly unexpected increase in crude stocks, the declines in product inventories and the sudden strength on the demand side shows the previously imbalanced supply-demand situation correcting rapidly, supporting current prices at 2-year highs.