(updates prices)
By Barani Krishnan
Investing.com - Global oil futures neared $75 per barrel on Wednesday, with U.S. prices not too far behind, as market participants focused on another huge weekly drawdown of crude stockpiles in the United States while overlooking a third straight weekly build in gasoline inventories.
Brent crude, which acts as the global benchmark for oil, was up 30 cents, or 0.4%, to $74.29 per barrel by 1:46 PM ET (17:46 GMT). Brent earlier hit $74.94, the highest for a day since April 2019.
West Texas Intermediate crude, the benchmark for U.S. oil, was down6 cents, or 0.1%, to $72.06 per barrel. It earlier hit a session high of $72.08, a peak not seen since October 2018.
Oil prices have been on a tear lately amid projections for one of the biggest ever summer demand periods for fuel in the United States as the country reopens fully from Covid-19 lockdowns.
The latest rally came after crude stockpiles in the world’s largest oil consuming country fell by 7.36 million barrels last week, according to data from the Energy Information Administration, or EIA.
Industry analysts tracked by Investing.com had anticipated a drawdown of just about 2.5 million barrels for the week ended June 11.
The tick up in crude draws came as U.S. refiners operated last week at 92.6 percent of capacity, a level last seen in summer 2019 well before the onset of the pandemic last year.
“Refiners are really leaning in on producing gasoline big time, in anticipation of summer driving demand that we are likely to be seeing,” John Kilduff, founding partner at New York energy hedge fund Again Capital, said in a response to the EIA’s Weekly Petroleum Status report.
Gasoline stockpiles rose by 1.9 million barrels last week, versus forecasts for a drawdown of 1.0 million barrels — demonstrating the stepped-up refining activity.
It was the third straight weekly rise in gasoline stockpiles, which showed back-to-back builds of 7.05 million barrels and 1.5 million barrels over the past two weeks.
Distillates inventories that include diesel and heating oil fell by 1.02 million barrels versus forecasts for a build of 500,000.
Aside from domestic consumption, exports of U.S. crude also jumped last week, rising 32% to an average of 3.88 million barrels per day from the previous week’s average of 2.93 million.
Production of U.S. crude rose as well, though not as much as exports or consumption of fuels. Crude output averaged 11.2 million barrels per day during the week ended June 11 versus the 11.0 million average in the previous week.