EIA: US crude stocks fall as refiners increase output

The Energy Information Administration reported on Wednesday that U.S. crude stockpiles dropped last week, as oil refiners increased production to coincide with the start the summer driving season. Fuel inventories, however, rose due to a weaker demand.

The EIA reported that crude inventories dropped by 4.3 millions barrels, to 436.1 million in the week ending May 30. This was in contrast with the analysts' polled expectations of a draw of 1 million barrels.

The EIA reported that refinery crude runs increased by 670,000 barrels a day. Utilization rates also rose 3.2 percentage points, to 93.4%.

The EIA reported that gasoline stocks increased by 5.2 millions barrels during the week, to 228.3million barrels. This was a much higher figure than the 600,000 barrels expected.

The product supplied of gasoline (a proxy for the demand) fell by 1.2 millions barrels per day, to 8.3million barrels. This is despite the beginning of summer driving after Memorial Day weekend, which is typically a period of increased demand.

Some concerns were raised by the lower number of orders.

Analyst Giovanni Staunovo at UBS said that there was a significant increase in refinery crude demand, which resulted in a large crude draw. "But after Memorial Day, the strong increase in supply with weaker implied demands resulted large refinery product inventory increases."

U.S. crude oil prices immediately after the release of these data pared their gains, and traded at $63.40 per barrel. ?

The EIA reported that distillate stocks, which includes diesel and heating oil rose 4.2 million barrels last week, as opposed to the expectation of a one million barrel increase.

The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, rose by 576,000 barges.

Last week, net U.S. crude oil imports increased by 389,000 barrels per day. (Reporting and editing by Margueritachoy; Additional reporting by Liz Hampton)

(source: Reuters)