The Energy Information Administration reported on Wednesday that U.S. crude and gasoline inventories dropped sharply during the past week due to strong export demand.

The EIA reported that crude stocks fell by 3.4 millions barrels to 433,000,000 barrels during the week ending July 26, which was more than triple the analysts' expectation in a survey for a drop of 1.1 million. The stock market fell for the fifth consecutive week. This is the longest stretch of declines since January 20,21.

The EIA reported that the stocks at Cushing, Oklahoma's delivery hub for U.S. Crude Futures dropped by 1.1m barrels during the past week.

The EIA reported that crude oil exports rose by 733,00 barrels per daily (bpd), to reach 4.9 millions bpd, last week. This resulted in a net drop of 651,00 bpd, to slightly more than 2 million.

U.S. total petroleum product exports increased by 148,000 barrels per day to reach 6.59 million barrels per day.

Matt Smith, Kpler's lead oil analyst, said that "strong exports helped offset lower refining activities and strong imports, encouraging a fifth successive draw in crude inventories." He called the report, "modestly supporting" oil prices.

The oil futures market, however, has pared its gains after the data as refinery utilization and implied gas demand have eased in recent weeks.

U.S. Crude Futures were $2.24 or 3% higher than the previous day's price of $76.97 per barrel at 11:20 am. Brent crude, however, rose by $1.92 or 2.4% to $80.55 at 1520 GMT.

Last week the finished motor gasoline supply, which is a good indicator of demand fell by 206,000 barrels per day to 9,25 million barrels per day, but the four-week average rose by 4.2 millions bpd.

The EIA reported that gasoline stocks dropped by 3.7 millions barrels during the past week, to 223.8million barrels. This was more than three times the expected 1 million barrel draw.

Smith, Kpler, noted that this was the second weekly decrease in fuel demand, a result of low refinery runs and steady demand.

The week's refinery usage rates dropped by 1.5 percentage points to 90.1%.

The distillate stocks, including diesel and heating oils, increased by 1.5m barrels last week, to reach 126.8m barrels. This was in contrast with expectations of a drop of 1.2m barrels. Stocks of fuel on the East Coast reached their highest level since March 2023.

(source: Reuters)