Crude oil inventories fell 4.6 million barrels in the December 22 week to 431.9 million, the sixth in a row of mostly large drawdowns that widened the year-on-year decline by 1.0 percentage point to 11.1 percent. But product inventories modestly increased again, with gasoline up 0.6 million barrels to 228.4 million, 0.5 percent above last year's level, and distillates up 1.1 million barrels to 129.9 million, 14.3 percent below last year at this time. Though the crude oil drawdown was smaller than the 6.0 million barrel decrease reported for the week to subscribers yesterday by the American Petroleum Institute (API), a private industry group, WTI prices fluctuated close to pre-release levels of around $59.50 per barrel immediately following the release of today's EIA report.
Refineries ramped up and operated at 95.7 percent of their operable capacity, 1.6 percentage points above last week's level. Production increased as well, averaging 10.2 million barrels per day for gasoline and and 5.5 million barrels per day for distillates.
Crude oil imports rose by 159,000 barrels per day during the week to a daily average of 8.0 million barrels. But over the last four weeks, imports averaged 7.6 million barrels per day, 5.9 percent below the level during the same period last year.
The demand side continued to strengthen, with total product supplied over the last four weeks averaging 20.6 million barrels per day, up 3.5 percent from last year at this time. The daily average for gasoline supplied over the period was 9.2 million barrels, up 2.0 percent from the same period last year. Daily distillate fuel product supplied averaged 4.1 million barrels, up 0.7 percent from the comparable 4-week period last year.
Today's report shows the U.S. oil market continuing to move closer to balance after being oversupplied in the first half of the year, with inventories of both crude oil and distillates in large year-on-year declines due mostly to smaller crude oil import volumes and partly due to a pickup in previously stagnant demand. 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, accelerating the pace of growing domestic production.