Oil futures rose Wednesday, with NYMEX August crude up 50 cents to $44.74/b as traders focused on a weekly decline in US production estimates and data showing fewer crude imports coming from Saudi Arabia this month.
Energy Information Administration data released Wednesday showed US crude stocks rose 118,000 barrels to 509.213 million barrels.
Analysts surveyed Monday by S&P Global Platts expected a draw in US crude stocks of 3.25 million barrels in the week that ended June 23.
US crude stocks would have drawn by 1.4 million barrels if barrels from the Strategic Petroleum Reserve hadn't been released into the commercial system, said Jenna Delaney, senior oil analyst at Platts Analytics.
One bullish factor contained in the EIA data was imports from Saudi Arabia, which have fallen this month, she said.
"The market had been watching for production cuts in Saudi Arabia to show up in lower imports to the US, which is viewed as a constructive factor in bringing the global market into balance," Delaney said.
The four-week moving average of US crude imports from Saudi Arabia fell 114,000 b/d to 856,000 b/d, the lowest level so far this year.
ICE August Brent rose 66 cents Wednesday to settle at $47.31/b.
Another supportive factor was a drop in estimates of US crude production, although analysts cautioned it was premature to say a trend was underway, especially in light of Tropical Storm Cindy, which may have impacted output.
Production in the Lower 48 states was down 55,000 b/d to 8.81 million b/d, according to EIA estimates.
It was only the third time this year that EIA weekly estimates showed a drop in production from the Lower 48 states, which was around 8.2 million b/d at the end of 2016.
Kyle Cooper, consultant at ION Energy, said the US inventory data was "reasonably supportive," but there were still reasons for bullish traders to be concerned, such as the drop in total petroleum demand below 20 million b/d.
In addition, higher yields meant the production of gasoline rose even though refinery utilization fell, he said.
"In the next couple weeks we could have a situation like this where throughputs fall, but production of refined products goes up," Cooper said.
Refinery utilization fell 1.5 percentage points last week to 92.5% of capacity. Analysts were looking for the rate to be unchanged.
By comparison, refinery utilization a year ago equaled 93% of capacity. That marks the first time since early April that the 2016 rate was higher than for the current year in the same reporting period.
Draws in both gasoline and distillate stocks were price-supportive for refined product futures.
US gasoline stocks fell 894,000 barrels to 240.972 million barrels in the week that ended June 23, EIA data showed. Analysts were looking for a draw of 900,000 barrels.
NYMEX July RBOB settled 2.35 cents higher at $1.4833/gal.
Distillate stocks fell 223,000 barrels to 152.272 million barrels, compared with analysts' expectations of a build of 500,000 barrels.
NYMEX July ULSD rose 1.93 cents to settle at $1.433/gal. - Platts -