On April 21, 2020, an overhead view shows crude oil storage tanks at the Cushing oil hub in Cushing, Oklahoma, United States. REUTERS/File Photo/Drone Base 14 JULY (Reuters) – The Energy Information Administration said on Wednesday that US crude oil stockpiles declined for the eighth week in a row last week, as renewed strength in the US economy continues to drive stronger fuel demand. The report was one hour late owing to technical problems, according to the EIA. Crude inventories (USOILC=ECI) decreased by 7.9 million barrels in the week ending July 9, significantly more than the 4.4 million barrels expected by analysts. In response to higher demand, refiners have been drawing down crude stocks for the longest time, dating back to January 2018, while U.S. production has remained relatively stable. “Amid continued strength in refinery runs and exports, U.S. oil inventories have declined for an eighth consecutive week – with another substantial reduction – falling to its lowest level since January 2020,” said Matt Smith, director of commodity analysis at ClipperData. Last week, net US crude imports (USOICI=ECI) declined by 1.1 million barrels per day, while exports alone increased to more than 4 million bpd. Crude output increased to 11.4 million bpd last week, the highest level since May 2020, although weekly data is less dependable than monthly statistics. Refinery crude runs (USOICR=ECI) decreased by 22,000 barrels per day, while refinery utilization rates (USOIRU=ECI) decreased by 0.4 percentage point. Even as refinery runs slowed, fuel supplies surged last week. Stocks of gasoline (USOILG=ECI) increased by 1 million barrels, vs predictions of a 1.8 million-barrel reduction. Stockpiles of distillates (USOILD=ECI), which comprise diesel and heating oil, increased by 3.7 million barrels, compared to estimates of an increase of 877,000 barrels. Over the latest four weeks, total product supplied, a measure of demand, was 20.6 million bpd, almost in line with figures from two years ago, before the coronavirus outbreak. However, weekly numbers revealed a significant drop. “Even though crude oil stockpiles have continued to fall, the large decline in gasoline and diesel demand has put pressure on pricing,” said Andrew Lipow, president of Lipow Oil Associates in Houston. The announcement caused oil benchmarks to fall. As of 11:44 a.m. EDT (1544 GMT), U.S. oil was down 1.4 percent, or $1.07, to $74.18 a barrel, while Brent was down 70 cents to $75.79 a barrel. The New York Energy Desk contributed to this report.
Marguerita Choy edited the piece.
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