By David Gaffen
(Reuters) – U.S. crude stockpiles posted their biggest one-week drawdown since December last week as imports dropped sharply, while inventories of refined products also fell, helping boost oil prices that have been weighed down by concerns about oversupply.
Crude inventories <USOILC=ECI> fell 5.2 million barrels in the week to May 5, the U.S. Energy Information Administration said, compared with expectations for a decrease of 1.8 million barrels. At 522.5 million barrels, crude stocks were the lowest since February.
U.S. crude imports <USOICI=ECI> fell last week by 799,000 barrels per day, the biggest weekly drop since mid February, to just 6.9 million bpd, the first time they have been below 7 million bpd since early March.
Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures <USOICC=ECI> fell 438,000 barrels, EIA said.
Crude futures rose on the data after enduring weeks of pressure over worries that a deal between OPEC and non-OPEC producers to reduce supply was not having the desired effect.
By 11:12 a.m., U.S. crude futures <CLc1> were up $1.30, or 2.8 percent, at $47.18 a barrel, and Brent crude <LCOc1> rose 2.5 percent, or $1.25, to $49.98 a barrel.
However, U.S. production rose, and refining runs declined, giving analysts pause about the market’s sharp rise.
“The headline crude oil drawdown number is certainly supportive, but it could be something a shooting star. The refinery utilization rate has come down quite a bit, after topping out a couple of weeks ago,” said John Kilduff, partner with energy hedge fund Again Capital in New York.
Refinery crude runs <USOICR=ECI> fell 418,000 bpd and utilization rates <USOIRU=ECI> dropped by 1.8 percentage points to 91.5 percent of overall capacity, after hitting a record 94.1 percent three weeks earlier, EIA data showed.
Gasoline stocks <USOILG=ECI> fell 150,000 barrels, compared with expectations in a Reuters poll for a 538,000-barrel drop. Distillate stockpiles <USOILD=ECI>, which include diesel and heating oil, dropped 1.6 million barrels, versus expectations for a 1.0 million-barrel draw, the EIA data showed.
Notably, U.S. crude production continued to climb, rising to 9.31 million bpd, from 9.29 million bpd the week earlier.
“Growing oil output in the U.S., which reached its highest level since August 2015, will remain a thorny issue for price bulls,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
(Additional reporting by Scott DiSavino; Editing by Marguerita Choy)