Surprise Drop in U.S. Crude Inventory

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The U.S. Energy Information Administration (EIA) released its weekly petroleum status report this morning. U.S. commercial crude inventories decreased by 1.3 million barrels last week, bringing the total U.S. commercial crude inventory to 382.7 million barrels. That is still well above the upper limit of the five-year range for this time of the year.

Total gasoline inventories decreased by 1.5 million barrels last week and remain in the middle of the five-year average range. Total motor gasoline supplied averaged slightly more than 8.5 million barrels a day over the past four weeks. That is a rise of about 1.5% compared with the same period a year ago.

Distillate inventories fell by about 700,000 barrels last week and remain in the lower half of the average range. Distillate product supplied averaged more than 3.6 million barrels a day over the past four weeks, which is up about 0.1% when compared with the same period last year. Distillate production totaled 4.3 million barrels a day last week, up by about 100,000 barrels a day when compared with the prior week.

The American Petroleum Institute last night reported an inventory decrease of 413,000 barrels in crude supplies last week, together with an increase of 278,000 barrels in gasoline supplies and a drop of 1.3 million barrels in distillate supplies. Platts estimated a build of 2 million barrels in crude inventories and decreases of 2 million barrels for gasoline stocks and 900,000 barrels for distillate stocks. Dow Jones had projected a rise in crude inventories of 1.7 million barrels.

Crude prices were up about 0.7% before the EIA report at around $92.60 a barrel, and they rose another $0.20 per barrel immediately following the report.

For the past week, crude imports averaged more than 7.3 million barrels a day, a decrease of about 520,000 barrels a day from the previous week. Refineries were running at 83.5% of capacity, with daily input of 14.5 million barrels a day. That is about 500,000 barrels a day more than the previous week. Refineries are boosting production again as they complete routine maintenance and the switch to summer-grade fuel.

The United States Oil ETF (NYSEMKT: USO) is up about 0.6%, at $33.27 in a 52-week range of $29.02 to $41.21.

The United States Gasoline ETF (NYSEMKT: UGA) is also up 0.6%. at $60.44, in a 52-week range of $45.13 to $65.86.

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