Crude oil inventories fell 5.6 million barrels in the December 1 week to 448.1 million, 7.8 percent below the level a year ago. But product inventories increased, with gasoline up 6.8 million barrels to 220.9 million, 3.8 percent below last year's level, and distillates up 1.7 million barrels to 129.4 million, a year-on-year decline of 17.4 percent. The EIA crude oil drawdown was roughly in line with the 5.5 million barrel drawdown reported yesterday to subscribers by the American Petroleum Institute (API), a private industry group, though the EIA gasoline build was substantially smaller than the API estimated increase of 9.2 million barrels. WTI prices fluctuated without direction around pre-release levels of $56.80 per barrel immediately following the release of the EIA data.
Refineries continued ramping up, operating at 93.8 percent of their operable capacity during the week, 1.2 percentage points above the prior week's level. Gasoline production nevertheless fell, averaging 9.8 million barrels per day, while the production of distillates did rise to an average of 5.4 million barrels per day.
Crude oil imports declined again, falling by 127,000 barrels per day to an average of 7.2 million barrels per day. The 4-week average remained at 7.6 million barrels per day, though this was 4.9 percent less than during the same period last year.
The demand side slightly softened, with total products supplied averaging 19.7 million barrels per day over the last four weeks, up 0.5 percent from the same period last year. The daily average for gasoline supplied during the period decreased to 9.1 million barrels, 0.5 percent above the level a year ago, while distillates supplied decreased to a daily average of 3.9 million barrels, up 0.6 percent from the same period last year.
The week's report continues to show a U.S. oil market that has moved from oversupply closer to balance due to smaller import volumes, though a slight demand slowdown may be causing some product inventory buildup. Current prices at 2-year highs and above most U.S. breakeven rates are likely to stimulate new shale oil exploration and development activities, increasing domestic production and supply down the road.