U.S. crude inventories showed a larger-than-expected drop last week, according to data released Wednesday by the U.S. Department of Energy, confirming the market's expectation that supplies would fall due to the disruption caused by a tropical storm in the Gulf of Mexico last month.
Crude oil stockpiles dropped by 2.8 million barrels to 358.0 million barrels for the week ended July 30. That compares to an average survey estimate of a 1.6-million-barrel drop. The American Petroleum Institute reported an 800,000-barrel decrease when the industry group released its weekly report late Tuesday.
Gasoline stockpiles rose by 729,000 barrels to 223 million barrels, the department's Energy Information Administration said in its weekly report, bucking the forecast for an 800,000-barrel decrease in a Dow Jones Newswires survey of 14 analysts.
Distillate stocks, which include heating oil and diesel fuel, added 2.2 million barrels to 169.7 million barrels, greater than the analysts' estimate of a 1.1-million barrel rise.
Inventories for crude oil and petroleum products are above normal levels, a problem that has persisted for more than a year. Consumption of refined products has been showing a modest recovery after falling sharply during the recession. Demand for gasoline was up 3% last week compared to the same period in 2009 while distillate fuel demand was 1.1% higher.
On the New York Mercantile Exchange, September crude oil futures were recently down 0.2% at $82.35, trimming earlier losses. September contracts for gasoline were down 0.5% at $2.1820 a gallon and heating oil were down 0.4% at $2.1910 a gallon.
Net crude imports dropped by 1.5 million barrels to 9.6 million barrels. Refining capacity utilization rose by 0.6 percentage point to 91.2%. Analysts had expected it to decline by 0.6 percentage point.
API pegged utilization at 86.7% capacity last week, a 0.7-percentage point decline from its figures for the prior week. The industry group reported that gasoline inventories rose by 2.3 million barrels and distillate stocks increased by 1.1 million barrels.
