U.S. crude stocks fell unexpectedly last week as refineries hiked output, the Energy Information Administration said on Wednesday. Crude inventories fell by 4.6 million barrels in the last week, compared with analysts’ expectations for an increase of 246,000 barrels. Oil prices pared losses sharply on the data, recovering marginally from a two-week low.
Brent crude was down 40 cents or 0.6 percent at $67.72 a barrel by 10:59 a.m. EDT (1459 GMT). U.S. crude was down 42 cents or 0.7 percent at $63.09 a barrel. [O/R] The drop in inventories came as refinery crude runs rose by 141,000 barrels per day, EIA data showed. Refinery utilization rates rose by 0.7 percentage point. U.S. refiners are beginning to restart units after seasonal maintenance work ahead of the high demand summer months. “The damage has been done on the Gulf Coast, where rocketing refinery runs – hark, above 9.1 million barrels per day – and low net imports have drawn down oil inventories by 7 million barrels,” said Matt Smith, director of commodity research at ClipperData. Oil inventories on the Gulf Coast are now 21 percent below year-ago levels, Smith said.