U.S. crude stocks drop sharply as refiners pick up activity, EIA says

Crude inventories fell by 5.4 million barrels in the week ended Nov. 11 to 435.4 million barrels, the U.S. Energy Information Administration said on Wednesday, compared with expectations in a Reuters poll for a 440,000-barrel drop.

“The drawdown in crude supplies is substantial. The crude supply is still very tight, heating oil supply is still below average,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “My gut feeling is it’s a very supportive report, it shows supplies are very tight.”

Refinery crude runs picked up in the most recent week, rising by 63,000 barrels per day to bring refinery utilization rates to 92.9% of overall capacity, up 0.8 percentage points.

Fuel stocks rose across the board, a salve for end-users worried about low inventories that have persisted for several months across the country.

U.S. gasoline stocks rose by 2.2 million barrels in the week to 207.9 million barrels, compared with expectations for a 310,000-barrel rise.

Distillate stockpiles, which include diesel and heating oil, rose by 1.1 million barrels in the week to 107.4 million barrels, versus expectations for a 513,000-barrel drop.

Oil prices were lower on the day, though pared some losses after the report. Brent crude fell $1.35, or 1.4%, to $92.51 as of 10:52 a.m. EST (1552 GMT), while U.S. crude fell $1.85 a barrel, or 2.1%, to $85.07.

Net U.S. crude imports fell by 1.24 million barrels per day, EIA said.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.6 million barrels. (Reporting by David Gaffen; Editing by Will Dunham)