The U.S. Energy Information Administration (EIA) released its weekly petroleum status report this morning. U.S. commercial crude inventories fell by 500,000 barrels last week, bringing the total U.S. commercial crude inventory to 364.7 million barrels, above the upper limit of the five-year range for this time of the year.

Total gasoline inventories rose by 100,000 barrels last week and remain in the lower half of the five-year average range. Total motor gasoline supplied averaged 8.7 million barrels a day over the past four weeks — a drop of 2.5% compared with the same period a year ago.

Estimates from Dow Jones called for a weekly crude inventory rise of 1.5 million barrels. Gasoline inventories were expected to decline by 700,000 barrels. Distillate supplies (heating oil and diesel fuel) were projected to fall by 300,000 barrels. Crude prices, which had fallen to near $90 a barrel before the report was released, have dropped to slightly below $90 following the EIA report and are down about 2.4% on the day so far.

For the past week, crude imports averaged 7.6 million barrels a day, a decrease of 2.3 million barrels a day from the previous week. Refineries were running at 87.4% of capacity, with daily input of 14.6 million barrels a day, 292,000 barrels a day lower than the previous week.

Distillate inventories fell by 3.7 million barrels last week and are near the lower limit of the average range. Distillate product supplied averaged 3.7 million barrels a day over the past four weeks, down 4.5% when compared with the same period last year. Distillate production totaled 4.6 million barrels a day last week, about the same as the prior week.

Refinery utilization rose from around 87% in the week ending September 21 to around 88.2% last week. Refineries on the U.S. West Coast are recovering from fires, power outages and pipeline problems.

The relatively small drop in crude oil inventories, though unexpected, could work to moderate falling crude prices, especially as the weather gets colder and demand for heating oil picks up.

The United States Oil ETF (NYSEMKT: USO) is down 2.4% at $33.20 in a 52-week range of $29.02 to $42.30.

The United States Gasoline ETF (NYSEMKT: UGA) is down 3.1% at $57.75. The 52-week range is $44.65 to $61.95.

Paul Ausick

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