US crude oil inventories drop more than expected

US crude oil stockpiles drew more quickly than expected last week with analysts pointing to near-record refinery runs as the main culprit.

For the week ending on 19 May, US commercial crude oil inventories fell by 4.4m barrels to reach 516.3m barrels, according to the Energy Information Administration, the US Department of Energy's statistical arm.

Market forecasts were for a smaller reduction of roughly 2.7m barrels.

The Strategic Petroleum Reserve was also tapped for 0.4m barrels, some of which was likely funnelled into commercial storage, according to Joseph Oyegoke, commodities economist at Capital Economics.

In parallel, refineries operated at 93.5% of capacity during that week, helping to explain a 0.8m barrel drop in gasoline inventories.

Production of gasoline hit 10.2m barrels per day last week, the government said.

Distillate inventories were also drawn down, by 0.5m barrels.

Total imports meanwhile declined by 296,000 b/d in comparison to the prior week's level.

Net imports on the other hand increased, Oyegoke pointed out, making the drop in commercial oil inventories that much more noteworthy, as exports fell by 461,000 b/d.

Yet as of 1706 BST, front month West Texas Intermediate crude futures were down by 0.65% to $51.14 per barrel on the ICE.

To take note of, in remarks to Bloomberg TV one analyst pointed out the impact that Venezuela's economic malaise was having on demand for crude and oil products, which in his opinion markets might not have accounted for properly.

Domestic US oil production edged higher by 15,000 b/d from the week before to reach 9.320m b/d.