Crude oil inventories fell 6.5 million barrels in the December 15 week to 436.5 million, 10.1 percent below the level a year ago. But product inventories increased, with gasoline up 1.2 million barrels to 227.8 million, 0.4 percent below last year's level, and distillates up 0.8 million barrels to 128.8 million, down 16.1 percent year-on-year. The drawdown in crude oil reported today by the EIA was larger than the 5.2 million decrease reported yesterday by the American Petroleum Institute (API), a private industry group, but that report also included a small total drawdown for products in contrast with the EIA's build in products. WTI prices fell about 20 cents to around $57.50 per barrel immediately following the release of today's EIA data.
Refineries ramped up operations to 94.1 percent of their operable capacity, 0.7 percentage points above last week's level. But product production volumes fell slightly nevertheless, averaging 10.1 million barrels per day for gasoline and 5.2 million barrels per day for distillates.
Crude oil imports rose by 471,000 barrels per day during the week to a daily average of 7.8 million barrels. Over the last four weeks, imports averaged 7.4 million barrels per day, 6.2 percent less than in the same period last year.
The demand side remained firm, with total product supplied averaging 20.3 million barrels per day, up 2.6 percent from last year. The daily average for gasoline supplied over the period was 9.0 million barrels, up 0.4 percent from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels per day, down 1.2 percent from last year at this time.
As has been the case in recent weeks, today's report shows a U.S. oil market that has moved from oversupply closer to balance, with inventories of both crude oil and products, particularly distillates, showing large year-on-year declines due mostly to smaller crude oil import volumes. But with current oil prices at 2-year highs and well above most U.S. breakeven rates, new shale oil exploration and development activities are bound to continue, increasing domestic production and supply at an even faster pace.