U.S. crude stockpiles posted their biggest one-week drawdown since December last week as imports dropped sharply, while inventories of refined products also fell, helping boost oil prices that have been weighed down by concerns about oversupply.
Crude inventories fell 5.2 million barrels (bbl) in the week to May 5, the U.S. Energy Information Administration (EIA) said, compared with expectations for a decrease of 1.8 million bbl. At 522.5 million bbl, crude stocks were the lowest since February.
U.S. crude imports fell last week by 799,000 bbl/d, the biggest weekly drop since mid-February, to just 6.9 million bbl/d, the first time they have been below 7 million bbl/d since early March.
Stocks at the Cushing, Okla., delivery hub for U.S. crude futures fell 438,000 bbl, EIA said.
Crude futures rose on the data after enduring weeks of pressure over worries that a deal between OPEC and non-OPEC producers to reduce supply was not having the desired effect.
By 10:12 a.m. CT (15:12 GMT), West Texas Intermediate crude futures were up $1.30, or 2.8%, at $47.18/bbl, and Brent crude rose 2.5%, or $1.25, to $49.98/bbl.
However, U.S. production rose, and refining runs declined, giving analysts pause about the market's sharp rise.
"The headline crude oil drawdown number is certainly supportive, but it could be something a shooting star. The refinery utilization rate has come down quite a bit, after topping out a couple of weeks ago," said John Kilduff, partner with energy hedge fund Again Capital in New York.
Refinery crude runs fell 418,000 bbl/d and utilization rates dropped by 1.8 percentage points to 91.5% of overall capacity, after hitting a record 94.1% three weeks earlier, EIA data showed.
Gasoline stocks fell 150,000 bbl, compared with expectations in a Reuters poll for a 538,000-bbl drop. Distillate stockpiles, which include diesel and heating oil, dropped 1.6 million bbl, vs. expectations for a 1 million bbl draw, the EIA data showed.
Notably, U.S. crude production continued to climb, rising to 9.31 million bbl/d, from 9.29 million bbl/d the week earlier.
"Growing oil output in the U.S., which reached its highest level since August 2015, will remain a thorny issue for price bulls," said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.