U.S. crude stocks fell more than expected in the latest week as imports dropped sharply, the Energy Information Administration said on Wednesday.
Crude inventories fell by 5.9 million barrels in the week to Dec. 16 to 418.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.7 million-barrel drop.
Net U.S. crude imports fell by 1.09 million barrels per day (bpd) to 1.5 million bpd. That was in part due to the shutdown of the Keystone pipeline, which closed after a spill of more than 14,000 barrels of crude in rural Kansas.
“Strong exports, as well as a drop in imports due to the Keystone pipeline outage, have resulted in a solid draw to crude inventories, reversing much of last week’s large build,” said Matt Smith, lead oil analyst for the Americas at Kpler.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 853,000 barrels in the last week, EIA said. That surprised some analysts, as Cushing gets Canadian barrels by way of the Keystone pipeline. However, Cushing has numerous links to other oil basins, particularly West Texas.
“We had an expectation that we were going to see those supplies fall,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
Oil prices rose on the news, with U.S. crude up $1.88, or 2.4%, to $78.09 a barrel as of 10:56 a.m. EST (1556 GMT) and Brent rose $1.75, or 2.2%, to $81.74 a barrel.
Refinery crude runs fell by 150,000 barrels per day in the last week, EIA said. Refinery utilization rates USOIRU=ECI fell by 1.3 percentage points in the week to 90.9% of overall capacity.
Refiners have been running at above-average rates due to high demand worldwide and domestically.
U.S. gasoline stocks rose by 2.5 million barrels, in line with analysts’ expectations for a 2.1 million-barrel rise. Distillate stockpiles which include diesel and heating oil, fell by 242,000 barrels in the week.
