By Anthony Harrup


U.S. crude oil inventories fell more than expected last week, while stocks of gasoline and distillate fuels saw large increases pointing to sluggish demand for products, according to data released Thursday by the U.S. Energy Information Administration.

Commercial crude-oil stocks excluding the Strategic Petroleum Reserve fell by 5.5 million barrels to 431.1 million barrels in the week ended Dec. 29, and were about 2% below the five-year average for the time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would fall by 2.7 million barrels.

Storage in the SPR rose by 1.1 million barrels to 354.4 million barrels, the EIA said.

Oil stored at Cushing, Okla., the Nymex delivery hub, increased by 706,000 barrels to 34.7 million barrels as refineries increased their capacity use to 93.5% from 93.3% the week before. Expectations were for refinery runs to slip by a fifth of a percentage point.

U.S. crude oil production eased to 13.2 million barrels a day from a record 13.3 million barrels a day the week before, the EIA said. Crude imports rose by 619,000 barrels a day to 6.9 million barrels a day, while exports increased by nearly 1.4 million barrels a day from the previous week to 5.3 million barrels a day.

Crude futures gave up opening gains and were lower Thursday afternoon, extending losses in the wake of the report showing more than 10-million-barrel increases in stocks of gasoline and distillate fuels.

"I think those large builds of gasoline and distillates are taking precedence. Fuel demand is once again stalling and that's putting pressure on the crude futures," said Dennis Kissler, senior vice president at BOK Financial.

The Nymex crude contract for February was down 1.9% at $71.33 a barrel and international benchmark Brent for March delivery was down 1.9% at $76.78 a barrel.

Gasoline stockpiles rose by 10.9 million barrels to 237 million barrels, against expectations of a 400,000-barrel build in the Journal survey. Gasoline inventories were slightly above the five-year average for the time of year, the EIA said.

Distillate stocks, mostly diesel fuel, increased by 10.1 million barrels to 125.9 million barrels and were 6% below the five-year average. Expectations were for a distillate stock build of 400,000 barrels.

Gasoline demand fell by 1.2 million barrels a day to just under 8 million barrels a day, and distillates demand was down by 1.3 million barrels a day to 2.7 million barrels a day, according to the EIA.

"Normally we start getting some winter demand in January, that still really hasn't showed up," Kissler said. "We're still seeing a well-above-normal temperature cycle this winter, and that's also hurting the price of crude." 


 
 
Change in U.S. oil inventories for the week ended Dec. 15: 
 
                   Crude       Gasoline      Distillates         Refinery Use 
EIA data:          -5.5          10.9           10.1                  0.2 
Forecast:          -2.7           0.4            0.4                 -0.2

Note: Numbers in millions of barrels, with the exception of refinery use, which is in percentage points.


Write to Anthony Harrup at anthony.harrup@wsj.com


(END) Dow Jones Newswires

01-04-24 1222ET