(Reuters) – U.S. commercial oil inventory drew more than expected last week as refineries stepped up processing and exports climbed, the Energy Information Administration said on Wednesday, as the war between the United States and Iran escalated.
Crude inventories, excluding stocks in the U.S. government’s Strategic Petroleum Reserve, fell by 7.2 million barrels to 404.5 million barrels, the in the week ended July 24, the EIA said, the lowest level since 2018. That compared with analysts expectations in a Reuters poll for a 1.3 million-barrel draw.
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Including the SPR, stocks drew down 11 million barrels to 712.2 million, the lowest level since 1984. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 771,000 barrels to 18.6 million barrels, EIA said, the lowest level since 2014 and below the 20 million operating level.
“This EIA report, with an unexpectedly large crude oil inventory decline, shows that oil supplies are still insufficient in this time of Middle East War and geopolitical uncertainty,” said Josh Young, chief investment officer at Bison Interests.
“And it raises questions of how the oil market will balance when the SPR eventually runs out, if there isn’t peace and stability by then,” he added.
U.S. and Brent crude futures extended gains after the report.
Brent crude traded $6.34, or 7.5%, higher at $90.42 at 10:47 a.m. ET, while U.S. West Texas Intermediate crude rose $5.9, or 7.5%, to $85.22.
Refinery crude runs rose by 271,000 barrels per day last week, the EIA said. Refinery utilization rates rose by 1.1 percentage points in the week to 97.2%. Exports edged higher to 3.5 million barrels per day. Net U.S. crude imports fell last week by 237,000 barrels per day, EIA said.
U.S. gasoline stocks rose by 7,000 barrels in the week to 211.3 million barrels, the EIA said, compared with expectations in a Reuters poll for a 715,000-barrel draw.
Distillate stockpiles, which include diesel and heating oil, rose by 1.1 million barrels in the week to 110.6 million barrels, versus expectations for a 146,000 barrel rise, the EIA data showed.
Reporting by Arathy Somasekhar in Houston; Editing by Chizu Nomiyama
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