US oil inventories posted record decline last week — EIA

US oil inventories fell by nearly 11.5 million barrels last week, the biggest weekly drop in over a year, according to data from the US Energy Information Administration (EIA). Analysts polled by Reuters had expected a much more moderate decline of just 1.8 million barrels.

The fall was mainly driven by mixed foreign trade data. US oil imports dipped to 1.1 million barrels per day, with exports climbing to 4.4 million barrels per day. Experts say the current exports level was on the horizon back when the world price differential between Brent and WTI was more encouraging for US suppliers. President of Lipow Oil Associates, Andy Lipow, says shipments abroad are likely to decline in the coming weeks due to the narrower spread.

Meanwhile, refinery utilization slumped 1.1 percentage points to 93.2% of total capacity, resulting in a slight uptick in stocks of gasoline and distillates, including diesel. At the same time, demand for gasoline has picked up. This may support refinery margins in the summer period, Lipow notes.