By Dan Molinski

U.S. inventories of crude oil declined last week as refinery activity sped up to its strongest level since 2019, according to data released Wednesday by the Energy Information Administration.

Benchmark U.S. oil prices that were higher before the report was released remained higher afterward. The Nymex front-month crude contract for July delivery was recently up 1.6% at $72.89 a barrel.

Commercial crude-oil stockpiles fell by 452,000 barrels last week to 459.2 million barrels, and are now 2% below the five-year average, the EIA said. Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would rise by 1.1 million barrels from the prior week.

The drop came despite a 1.9-million-barrel transfer of crude oil last week from the nation's Strategic Petroleum Reserve to the commercial side, in transactions being conducted by the Department of Energy each week over the past couple months.

Oil stored at Cushing, Okla., the delivery point for U.S. stocks, increased by 1.7 million barrels from the previous week to 40.6 million barrels, the EIA said in its weekly report.

U.S. crude-oil production jumped by 200,000 barrels a day last week, to 12.4 million barrels a day, the highest since March 27, 2020, according to the EIA.

Gasoline stockpiles rose by 2.7 million barrels to 218.8 million barrels, compared with analysts' expectations of just a 200,000-barrel increase.

Distillate stocks, which are mostly diesel fuel, jumped by 5.1 million barrels to 111.7 million barrels, and are now about 16% below the five-year average, the EIA said. Analysts had forecast distillates inventories would rise by a smaller, 1 million barrels last week.

The refining capacity utilization rate soared by 2.7 percentage points from the previous week to 95.8%. That was the highest rate since Aug. 16, 2019, and compared with expectations for just a 0.5-percentage-point increase.

 
   U.S. oil inventories for the week ended June 2: 
 
                  Crude  Gasoline    Distillates  Refinery Use 
   EIA data:       -0.5     +2.7         +5.1        +2.7 
   Forecast:       +1.1     +0.2         +1.0        +0.5 
 

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

Write to Dan Molinski at dan.molinski@wsj.com

(END) Dow Jones Newswires

June 07, 2023 11:12 ET (15:12 GMT)