Crude oil inventories fell 7.1 million barrels in the December 29 week to 424.5 million, the seventh in a row of mostly large drawdowns that increased the year-on-year decline by another 0.3 percentage points to finish the year 11.4 percent below last year's level. But product inventories increased again, and substantially, with gasoline up 4.8 million barrels to 233.2 million, 1.0 percent below last year's level, while distillates rose 8.9 million barrels to 138.8 million, 14.1 percent below last year at this time. The EIA crude oil drawdown exceeded the 4.992 million barrel weekly decline reported to its subscribers yesterday afternoon by the American Petroleum Institute (API), a private industry group, but so did the EIA's product inventory builds, which the API reported as only 1.87 million for gasoline and 4.277 million for distillates. WTI prices extended earlier gains immediately following the release of the EIA data, rising about 30 cents to around $62.05 per barrel, the highest level since May 2015.
Refineries ramped up operations closer to maximum levels, operating at 96.7 percent of their operable capacity, up 1 percentage point from the prior week. Gasoline production nevertheless decreased, averaging 9.7 million barrels per day while the production of distillates did rise, averaging 5.6 million barrels per day.
Crude oil imports fell by a marginal 27,000 barrels per day to an average of 8.0 million per day last week. But the average over the last four weeks rose to 7.8 million barrels per day, 0.1 percent below last year during the same period.
The demand side remained steady and strong, with total products supplied over the last four weeks averaging 20.6 million barrels per day, up 5.0 percent from the same period last year. Gasoline product supplied averaged 9.2 million barrels per day, 2.1 percent above the level a year ago, while distillates supplied averaged 4.1 million barrels per day, up 5.8 percent from the same period last year.
With crude inventories finishing the year down 11.4 percent, gasoline down 1.0 percent and distillates down 14.1 percent, it appears that the combination of dampened imports and strong domestic demand has more than offset the impact of increased domestic production and siphoned off the oversupply present at the start of the year.