US gasoline stockpiles drop twice expected amount last week

New US inventories figures from the Energy Information Administration show that while crude oil stockpiles were higher in the week ending 28 March, gasoline inventories were down twice as much as expected.

According to the EIA, crude oil inventories grew by 7.4 million barrels last week, while gasoline stockpiles dropped by 4.5 million barrels and distillates in storage were down by 1.6 million barrels.

Despite the decline in gasoline inventories, total stockpiles at 224.7 million barrels remain 19.5 million barrels higher than there were last year at the same time.

Demand for gasoline in the US was up by 1 percent last week over the same week last year, according to the EIA report, leading to the possibility that higher demand coupled with declining inventories could lead to more price increases.

However, some analysts believe that demand is lower than government figures show.

In addition, part of the decline in stockpiles has less to do with demand than with the reality that refinery activity, although up by 0.2 percent last week, remains at just 82.4 percent of capacity.

In afternoon trade, May West Texas Intermediate contracts had added $2.82 to $103.80 per barrel on the New York Mercantile Exchange, while Brent crude for May delivery was $1.63 higher to $101.80 per barrel on the ICE Futures Europe exchange in London.

At the same time, Nymex May gasoline was up 6 cents to $2.70 per gallon while May heating oil was 2 cents higher to $2.90 per gallon and May natural gas gained 11 cents to $9.83 per million British thermal units.