Updates price reaction, adds details from report, analyst comments

By Liz Hampton and Siddharth Cavale

U.S. crude and fuel inventories continued to draw down last week as countries around the globe scrambled to fill supply gaps caused by disruptions from the war with Iran, the Energy Information Administration said on Wednesday.

Crude inventories fell by 2.3 million barrels to 457.2 million barrels in the week ended May 1, the EIA said, compared with analysts' expectations in a Reuters poll for a 3.3 million-barrel draw. Crude stocks at the Cushing, Oklahoma, delivery hub USOICC=ECI fell by 648,000 barrels in the week, the EIA said.

Fuel inventories also declined, as exports of petroleum products rose to their highest level on record.

"We see a continued liquidation of refined product and crude oil inventories as the U.S. supplies other regions of the world because of Middle East disruptions," said Andy Lipow, founder of Lipow Oil Associates.

U.S. gasoline stocks USOILG=ECI fell by 2.5 million barrels in the week to 219.8 million barrels, the EIA said, compared with analysts' expectations in a Reuters poll for a 2.1 million-barrel draw.​

Distillate stockpiles USOILD=ECI, which include diesel and heating oil, fell by 1.3 million barrels in the week to 102.3 million barrels, their lowest level since 2005, according to EIA data. Analysts had expected a 2.4 million-barrel drop in supply.

U.S. distillate fuel oil exports hit a record 1.9 million bpd last week, up from 1.6 million bpd in the prior week, EIA data showed.

"Distillate stockpiles are down 20% since February 6, and that draw is expected to continue as we go into the planting season in the Midwest," said Lipow.

While the drawdown is a concern, the market is less concerned because it’s driven by exports rather than domestic demand, Phil Flynn, senior analyst at Price Futures Group said.

Oil futures extended losses following the report. Global Brent crude futures LCOc1 were trading at $101.96 a barrel, down $7.91 at 10:54 a.m. ET (1454 GMT), while U.S. West Texas Intermediate futures CLc1 were off $7.14 a barrel at $95.13.

Total product supplied, a proxy for demand, fell by 1.647 million bpd to 19.48 million bpd. Gasoline consumption was off by 291,000 bpd to 8.81 million bpd.

Refinery crude runs USOICR=ECI fell by 42,000 barrels per day in the week, the EIA said, while utilization rates USOIRU=ECI rose by 0.5 percentage points in the week to 90.1%.

Net U.S. crude imports USOICI=ECI rose by 1.42 million barrels per day, EIA said, while U.S. crude exports declined by 1.69 million bpd to 4.75 million bpd after hitting a record last week.