US commercial crude stocks fell 9.87 million barrels to 373.92 million barrels for the reporting week ended July 5, Energy Information Administration data showed Wednesday.
The latest decline marks the sharpest two-week draw in US crude stocks ever reported in EIA data, as stocks have tumbled 20.22 million barrels from 394.14 million barrels for the reporting week ended June 21.
This is also the first time since March 2012 that US crude stocks are lower than year-ago levels. Last year at this time, crude stocks were 378.2 million barrels, just over 11% above the EIA five-year average.
Despite the declines, US crude stocks remain 8.2% above the five-year average.
Analysts surveyed Monday by Platts had been expecting a draw closer to 3.8 million barrels.
Crude stocks fell sharply in Cushing, Oklahoma -- the delivery point for the NYMEX crude futures contract. Cushing stocks fell a bullish 2.69 million barrels to 46.97 million barrels last week, representing a 37% surplus to the five-year average. However, this surplus is down sharply from the prior reporting period, when Cushing stocks were 46% above the five-year average.
The Cushing draw helped push total Midwest stocks 3.48 million barrels lower to 111.63 million barrels as imports from Canada tumbled 169,000 b/d to 2.36 million b/d, likely due to heavy flooding in Alberta.
However, the sharpest declines were seen in the Gulf Coast region, where stocks fell 4.16 million barrels to 181.39 million barrels last week, as imports remain sluggish and crude runs rampant.
Despite increasing 130,000 b/d to 3.43 million b/d, imports to the Gulf Coast are still comparatively low. Imports were 4.51 million b/d this reporting week a year ago.
Crude imports from Venezuela tumbled 268,000 b/d to 443,000 b/d, while imports from Angola dropped 294,000 b/d to 72,000 b/d. Crude imports from Canada, Iraq, Nigeria and Brazil were also lower on the week.
Crude imports from Saudi Arabia, meanwhile, jumped 456,000 b/d to 1.33 million b/d, imports from Colombia rose 590,000 b/d to 828,000 b/d.
Likewise, although crude runs to Gulf Coast refineries fell 28,000 b/d to 8.5 million b/d, they are still elevated. Gulf Coast refineries are operating at 94.7% of capacity.
Total US crude inputs at 16.118 million b/d were the highest since the week ending July 1, 2005, when inputs were at 16.464 million b/d. This helped to push refinery utilization rates 0.2 percentage point higher to 92.4% of capacity, largely in line with analysts expectations.
Meanwhile, a rise in operable capacity and runs in the US Midwest and on the Gulf Coast over much of the past year has more than made up for a drop on the Atlantic Coast.
USAC operable capacity at 1.293 million b/d the week ending July 5 was down from 1.618 million b/d in March 2012, as refiners closed because of poor margins. Over roughly the same period, operable capacity on the Midwest has risen 106,000 b/d to 3.769 million b/d, while USGC capacity has climbed 368,000 b/d to 9.093 million b/d, EIA data showed.
GASOLINE STOCKS DROP
US gasoline stocks meanwhile fell 2.63 million barrels to 221.03 million barrels last week, led by a 1.76 million-barrel draw in Gulf Coast stocks.
On a four-week moving average, US implied demand for gasoline rose 163,000 b/d to 9.08 million b/d. At 9.3 million b/d last week, outright demand is at its highest in nearly a year.
Stocks on the Atlantic Coast -- home to the New York Harbor-delivered NYMEX RBOB contract -- fell 362,000 b/d to 62.64 million barrels. USAC gasoline imports at 573,000 b/d on a four-week moving average were down 242,000 b/d from the same period last year.
Although with US refiners increasing runs, and with access to USGC gasoline via the Colonial Pipeline, the need for imported gasoline may have waned. US gasoline production at 9.586 million b/d last week was up 486,000 b/d from the week ending June 14. Of the total increase, 163,000 b/d was seen in the Midwest, and 146,000 b/d in the USGC.
US distillate stocks rose 3.04 million barrels to 123.81 million barrels last week as combined low and ultra low sulfur diesel output at 4.825 million b/d was up 206,000 b/d on the week, and at a record high.
Although combined LS and ULSD stocks on the USAC climbed 2.61 million barrels last week to 32.02 million barrels, putting inventories at 20% above the five-year average, production of ULSD in the region fell.
Gulf Coast ULSD production rose 92,000 b/c to 2.56 million b/d (LSD production stayed flat), Midwest ULSD production rose 56,000 b/d to 1.014 million b/d, and West Coast ULSD production rose 67,000 b/d to 596,000 b/d.
Stocks on the USGC -- which is a major supplier to the USAC as well as a major exporter -- fell 1.58 million barrels to 33.46 million barrels, a 7.5% deficit to the five-year average.
Implied demand for distillates -- which does not include exports -- fell 58,000 b/d to 4.051 million b/d on a four-week moving average.
