US oil stocks fell by 1.63 million barrels last week, triple the forecast -- EIA

EIA report shows surprise decline in US oil stocks

Crude oil stockpiles in the United States fell by 1.63 million barrels in the week ended June 24, according to data from the Energy Information Administration (EIA) released on Wednesday.

The decline was much larger than the 532,000-barrel draw that analysts had expected, and it brought total US crude inventories down to 438.4 million barrels, the lowest level since October 2019.

The surprise draw in crude stocks was largely due to a sharp increase in exports, which rose by 1.2 million barrels per day to 4.7 million bpd. Refineries also boosted their crude processing rates, which increased by 393,000 bpd to 17.9 million bpd.

Gasoline stocks also decline

In addition to the decline in crude stocks, gasoline inventories also fell by 2.4 million barrels last week, to 220.1 million barrels. This was slightly more than the 2.2 million-barrel draw that analysts had expected.

The decline in gasoline stocks was due to a combination of factors, including strong demand and reduced refinery production. Gasoline demand rose by 1.1 million bpd to 9.2 million bpd last week, while refinery production fell by 193,000 bpd to 10.1 million bpd.

Distillate stocks rise

Distillate fuel stocks, which include diesel and heating oil, rose by 2.3 million barrels last week, to 115.7 million barrels. This was slightly more than the 2.1 million-barrel build that analysts had expected.

The increase in distillate stocks was due to a combination of lower demand and increased refinery production. Distillate demand fell by 334,000 bpd to 4.5 million bpd last week, while refinery production rose by 205,000 bpd to 5.4 million bpd.

Implications for oil prices

The surprise decline in US oil stocks is likely to support oil prices in the coming weeks. The draw in crude stocks was particularly large, and it came at a time when global oil demand is recovering from the COVID-19 pandemic.

The decline in gasoline stocks is also supportive of oil prices, as it suggests that demand for gasoline is strong. However, the increase in distillate stocks could put some downward pressure on prices, as it suggests that demand for distillate fuels is weakening.

Overall, the EIA report is bullish for oil prices in the short term. The large draw in crude stocks and the decline in gasoline stocks are both supportive of higher prices. However, the increase in distillate stocks could put some downward pressure on prices in the longer term.