Analysis of U.S. EIA Oil Inventories Data:
U.S. commercial crude oil inventories decreased by 5.1 million barrels during the week ended December 8, marking the fourth consecutive weekly decline. The largest regional drawdown took place at Cushing, Oklahoma (delivery point for NYMEX oil futures contracts) which declined by 3.3 million barrels to 52.2 million barrels. Inventories at Cushing have now fallen by 12.1 million barrels over the past 5-weeks, and are at their lowest level since March 2015.
Crude oil imports into the U.S. increased by 161,000 barrels per day (b/d) during the week, driving by flows from Canada rebounding after the restart of TransCanada's Keystone pipeline.
Refinery runs fell by 243,000 b/d during the week, with declines taking place in all 5-PADD regions. Despite the decline, refinery runs remain well above both the 2015 and 2016 levels for the same week. Runs typically remain fairly flat during the month of December.
Gasoline inventories showed a build of 5.7 million barrels during the week, while distillate inventories dropped by 1.4 million barrels. Strong builds in gasoline during the past several weeks have caused the inventory level to return to near 2016 levels. Distillate inventories, on the other hand, are well below 2015 and 2016 levels. From a 4-week moving average standpoint, gasoline demand is tracking close to 2016 levels, while distillate demand is greater than the 5-year min/max range.
The Brent price declined by more than $0.5/bbl during the hour after the numbers were released. Other headlines during the day include the Federal Reserve's decision on interest rates, and tax bill negotiations on Capitol Hill.