Oil Prices Fall Despite Large Drawdown in Gasoline Inventories

2016-08-11

Despite a larger than expected draw in gasoline stocks, oil prices fell after the Energy Information Agency’s (EIA) Weekly Petroleum Status Report, which showed a surprise build in crude inventories for the week ending Aug. 5. Both U.S. and international benchmarks fell almost 2 percent off the newsflow.

The front-month West Texas Intermediate (WTI) contract settled down 2.5 percent on the NYMEX at $41.71 per barrel, while the Brent front-month contract fell 2.1 percent on the ICE to $44.05 per barrel.

According to the EIA, the U.S. refinery utilization rate fell approximately 1 percent week over week, from 93.3 percent to 92.2. The East Coast (PADD 1) refinery utilization rate fell to 80.6 percent – the lowest level since 2011. The region saw a large uptick in imports of gasoline blending components (a refinery output) week over week, which could partially explain why refineries were run at such low capacity.