U.S. crude, gasoline stocks fall as fuel demand rises
U.S. crude and gasoline stocks fell and gasoline demand reached its highest since 2019, the U.S. Energy Information Administration said, signaling increasing strength in the U.S. economy.
Crude inventories fell by 6.9 million barrels in the week to July 2 to 445.5 million barrels, the lowest since February 2020, and more than the expected 4 million-barrel drop estimated in a Reuters poll.
Crude stocks have declined steadily for several weeks as refiners process more oil into gasoline, diesel and other products. Overall product supplied - a proxy for demand from end-users of fuels - rose to 20.9 million barrels per day (bpd), in line with the same trend two years ago prior to the coronavirus pandemic.
In addition, gasoline demand surged to a one-week record, but the four-week average of gasoline supplied was at 9.5 million bpd, the highest since October 2019.
“The report is bullish, there’s no doubt,” said Tony Headrick, energy market analyst at CHS Hedging. “For all of the estimates out there suggesting gasoline demand was strong that showed true, leading to a sharp drawdown in inventories.”
Oil prices rose on the news, shaking off earlier losses. U.S. crude futures were up 4 cents to $72.24 a barrel while Brent gained 10 cents to $73.54 as of 11:14 a.m. EDT (1514 GMT).
Production rose to 11.3 million bpd, still short of the 2019 record of nearly 13 million bpd. Weekly production figures can tend to be volatile, however, and most analysts regard monthly data as more reliable.
“Even though we saw a little bit of a rise to 11.3 million, we’ve still got a long way to go there to make it back to where we were,” said John Kilduff, a partner at Again Capital in New York.
Distillate stockpiles, which include diesel and heating oil, rose by 1.6 million barrels in the week.
Reporting By David Gaffen; Editing by David Gregorio a
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