U.S. crude stocks, gasoline and distillate inventories fell last week, as refineries reduced runs ahead of the year-end, the Energy Information Administration said on Wednesday.
Road fuel demand improved marginally in the most recent week, and analysts said steadier fuel consumption in 2021 will depend on whether COVID-19 vaccines become readily available and support an economic rebound.
Crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 3.2 million-barrel drop. That follows a surprising 3-million-barrel jump in inventories reported by the American Petroleum Institute, an industry group, on Tuesday.
Prices rose, with U.S. crude futures gaining 2%, or 95 cents, to $47.97 a barrel as of 10:47 a.m. ET (1547 GMT). Brent rose 2% as well, hitting $51.06 a barrel.
Refinery crude runs fell by 169,000 barrels per day in the week, EIA said. Refinery utilization rates fell by 1.1 percentage points.
U.S. gasoline stocks fell by 1.1 million barrels, compared with expectations for a 1.2 million-barrel rise.
“It was good to see gasoline demand back above 8 million bpd, which is supportive and shows people are getting back on the road a bit,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Gasoline demand as measured by product supplied by refineries rose modestly in the most recent week, but is down nearly 14% over the last four weeks when compared with the year-ago period. Fuel demand has been soft all year due to COVID-19, down 13% in 2020.
“The biggest headwinds for demand are going to be how quickly a vaccine can be rolled out to the general population and getting people back on the road and into planes,” said Andrew Lipow, president of Lipow Oil Associates in Houston.
Distillate stockpiles, which include diesel and heating oil, fell by 2.3 million barrels, versus expectations for a 904,000-barrel drop, EIA said.
By David Gaffen