US Oil Stockpiles Tumble 2nd Week in Row as Soft Prices Boost Consumption

WASHINGTON (Sputnik) - US crude oil and fuel inventories tumbled for a second week in a row, according to weekly data from the government-run Energy Information Administration (EIA) that suggested that relatively-low energy prices in recent months had boosted consumption among Americans.

Crude stockpiles fell by 1.356 million barrels during the week ended September 30, versus forecasts by industry analysts for a build of 2.05 million and against the previous week’s slide of 215,000, the EIA’s Weekly Petroleum Status Report showed.

Inventories of gasoline fell by 4.728 million barrels last week against expectations for a build of 1.334 million barrels. In the previous week, gasoline inventories fell by 2.422 million barrels.

Stockpiles of distillates - the oil variant required for making the diesel needed for trucks, buses and trains, as well as the fuel for jets - fell by 3.443  million barrels during the week ended September 30, versus forecasts for a drop of 1.367 million.  In the previous week, distillate stockpiles fell by 2.892 million barrels.

John Kilduff, partner at New York energy hedge fund Again Capital and a regular commentator on oil, attributed the drawdowns to consumer demand amid the plunge in crude and fuel prices over the past quarter.

“There’s been obviously strong consumer demand to the relatively-low pump prices of fuel over the past two months, and that’s why you’re seeing demand at these levels even at this time of year,” Kilduff said, referring to the autumn season when driving activity typically slows.

Retail demand for gasoline shot up to nearly 9.5 million barrels per day last week from the previous week’s 8.8 million, the EIA data showed.

“By right, there should be fewer cars on the road with the end of peak season,” Kilduff said. “But you’re probably also having people making trips to the pump to fill up even when their gas tank is far from empty, as there concerns that fuel prices have started going up again in some places.”

Gasoline at the pumps across the United States averaged $3.831 per gallon on Wednesday, up from last week’s level of $3.765, according to the American Automobile Association.