EIA: US Crude Stockpiles Drop As Refineries Restart After Harvey
NEW YORK, Sept 27 (Reuters) - U.S. crude oil inventories fell unexpectedly last week as refineries hiked output due to restarts following Hurricane Harvey and exports soared, while gasoline stockpiles posted a surprise build, the Energy Information Administration said on Wednesday.
Crude inventories fell 1.8 million barrels in the week to Sept. 22, compared with analysts' expectations for an increase of 3.4 million barrels.
"The highlight from today's EIA report isn't the larger-than-expected draw to stocks, but the reported cause of this draw," said Troy Vincent, oil analyst with Clipper Data. "The EIA showed both refinery runs and exports surging higher last week."
Refinery crude runs increased by 1 million barrels per day as utilization rates rose by 5.4 percentage points to 88.6 percent of total capacity, its highest rate since Harvey hit on Aug. 25, EIA data showed.
U.S. crude exports rose 563,000 bpd to a new record of 1.49 million bpd in the week. Crude imports fell by 504,000 barrels per day.
Vincent expects exports to continue to rise in the coming weeks, so long as U.S. West Texas Intermediate (WTI) crude remains at a discount to global benchmark Brent.
With WTI's discount to Brent at about its widest in two years <WTCLc1-LCOc1>, U.S. crude has become increasingly competitive in foreign markets.
The data's impact was bearish on the markets with Brent futures trading down 54 cents a barrel at $57.90 by 11:03 a.m. EDT (1503 GMT). U.S. crude was down 7 cents a barrel at $51.81.
Crude stocks at the Cushing, Oklahoma, delivery hub for WTI futures rose by 1.2 million barrels, EIA said.
Gasoline stocks rose 1.1 million barrels, compared with analysts' expectations in a Reuters poll for a 921,000-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 814,000 barrels, versus expectations for a 2.2 million-barrel drop, the EIA data showed.
"Further drawdowns in U.S. crude stocks are expected over the coming weeks as the country’s gasoline and distillate inventories are replenished," said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.
"Nevertheless, gains in WTI oil prices will be capped because of recovering oil production in the U.S.”
U.S. crude production for the week rose to 9.55 million bpd, up from 9.51 million bpd the previous week and higher than levels before Harvey hit the Gulf Coast.
(Reporting By Jessica Resnick-Ault; Editing by Marguerita Choy)
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