U.S. crude stocks down, product demand hits all-time record
U.S. crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said.
Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop.
Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
The four-week average rose to 21.4 million bpd, highest since September 2019.
"Total products supplied increased a fair amount. That's surprising to me as we see product demand remaining robust despite some of the Delta variant concerns," said Tony Headrick, analyst at CHS Hedging.
Next week's figures are likely to be skewed by the drop in offshore output due to Hurricane Ida, which has also shut numerous refineries on the U.S. Gulf Coast.
U.S. production rose to 11.5 million barrels per day, highest since May 2020, even though weekly output figures are volatile and analysts generally rely more on monthly data from EIA on production.
Refinery crude runs fell by 134,000 barrels per day in the last week, EIA said. Refinery utilization rates fell by 1.1 percentage points in the week as the summer driving season wanes and the less-active turnaround season approaches. Many refiners delayed maintenance last year due to a lack of workers related to COVID-19.
U.S. gasoline stocks rose by 1.3 million barrels in the week to 227.2 million barrels, the EIA said, compared with expectations for a 1.6-million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 1.7 million barrels, versus expectations for a 650,000-barrel drop. Net U.S. crude imports fell last week by 45,000 barrels per day, EIA said.
Oil prices remained lower on the day. U.S. crude fell 1.1%, or 81 cents, to $67.69 a barrel as of 10:53 a.m. EDT (1453 GMT). Brent dropped 74 cents, or 1%, to $70.90 a barrel.
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