February 22, 2018, by Devika Krishna Kumar
(Reuters) – U.S. crude oil stockpiles fell unexpectedly last week as net imports dropped to a record low due to a surge in exports, while inventories at the key storage hub in Cushing, Oklahoma continued to slide, the Energy Information Administration said on Thursday.
Crude inventories fell 1.6 million barrels in the week to Feb. 16, compared with analysts’ expectations for an increase of 1.8 million barrels.
Net crude imports fell last week by 1.6 million barrels per day to 4.98 million bpd, the lowest level since the EIA started recording the data in 2001.
Exports of U.S. crude jumped to just above 2 million bpd, close to a record high of 2.1 million hit in October. That helped to push net imports to the lowest level on record.
“Even though refinery runs dropped below 16 million barrels per day for the first time since the aftermath of Hurricane Harvey, lower net imports have resulted in a draw,” said Matt Smith, director of commodity research at Clipperdata.
“The big jump in crude exports appears to have been because the EIA included the first export cargo from LOOP in last week’s number,” he said.
The Louisiana Offshore Oil Port (LOOP), the largest privately-owned crude terminal in the United States, has completed the first very large crude carrier (VLCC) crude oil loading operation at its deepwater port, the company said on Sunday. The supertankers can ship about 2 million barrels of oil.
Washington lifted a 40-year ban on oil exports in 2015, and since then tankers filled with U.S. crude have landed in more than 30 countries.
Oil prices rose after the data, with U.S. crude futures jumping more than $1 to a two-week high at $62.85 a barrel.
“It was a trifecta for the bulls with imports down, Cushing inventories continuing to slide lower and exports of crude soaring to over 2 million barrels per day,” said John Kilduff, partner at Again Capital LLC in New York.
Crude stocks at the Cushing, Oklahoma, delivery hub, the delivery point for U.S. futures, fell by 2.7 million barrels, the ninth straight week of declines, the EIA said. The combination of a new pipeline running from the hub to Memphis, along with reduced flows from TransCanada’s Keystone pipeline, has more than halved supplies at Cushing since November.
Refinery utilization rates fell by 1.7 percentage points to 88.1 percent of total capacity as plant maintenance ramped up ahead of the high-demand summer season. Refinery crude runs fell by 329,000 bpd to 15.8 million bpd, EIA data showed.
Gasoline stocks rose 261,000 barrels, compared with analysts’ expectations in a Reuters poll for a 283,000-barrel decline.
Distillate stockpiles, which include diesel and heating oil, fell by 2.4 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed.
Reporting By Devika Krishna Kumar, Additional reporting by Stephanie Kelly; Editing by Marguerita Choy