US crude stocks unexpectedly fall as refiners run in overdrive
4/8/2016 12:00:00 AM
April 6 (Reuters) -- US crude oil inventories unexpectedly fell from record highs last week as refineries continued to hike output and imports fell, while gasoline stocks rose, snapping a six-week decline, data from the Energy Information Administration (EIA) showed on Wednesday.
Crude inventories fell 4.9 million bbl in the week to April 1, compared with analysts' expectations for an increase of 3.2 million bbl.
Crude stocks at the Cushing, Oklahoma, delivery hub for US crude futures rose 357,000 bbl, the EIA said.
US crude futures were up $1.86, or 5.2%, at $37.75/bbl by 12:05 p.m. EDT. Brent futures, the European benchmark, rallied even more, rising $2, or 5.3%, to $39.87.
The EIA report was "modestly supportive" with the jump in refinery runs and fall in imports "obvious catalysts in causing overall crude oil inventories to decline," said John Kilduff, a partner at New York energy hedge fund Again Capital.
US crude imports fell 446,000 bpd, with some pointing to weather issues in the Houston Ship Channel last week.
Refinery crude runs, which have remained at record seasonal levels for most of this year thanks to unusually strong gasoline margins, rose by 199,000 bpd, EIA data showed.
Refinery utilization rates rose 1 percentage point to 91.4% of total capacity, although usage could ebb with more maintenance expected this month.
"For refiners, they see a market with strong demand for gasoline and decent profit margins. I expect they will begin ramping up in order to capture the sweet spot of high volume and high margins for as long as it lasts," said David Thompson, executive vice-president at energy-specialized commodities broker Powerhouse in Washington.
US gasoline demand over the past four weeks was at 9.36 million, up 4.2% from a year ago.
Gasoline stocks, which swelled this winter to record highs and remain at unusually high levels for this time of year, rose 1.4 million bbl after six consecutive declines, compared with expectations for a 1.0 million-bbl drop.
Distillate stockpiles, which include diesel and heating oil, rose 1.8 million bbl, versus expectations for a 333,000-bbl drop, the EIA data showed.
(Reporting by Jonathan Leff, Barani Krishnan and Catherine Ngai in New York; Editing by Marguerita Choy)
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