Crude oil storage tanks are seen from above at the Cushing Petroleum Center, appearing to run out of space to hold a historic supply glut that has sent prices plummeting, in Cushing, Oklahoma March 24, 2016. REUTERS /Nick Oxford/File Photo/File photo

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March 30 (Reuters) – U.S. commercial crude inventories and the country’s strategic reserves have both fallen over the past week as refiners increased output amid tight global supply, the country said on Wednesday. ‘Energy Information Administration.

However, demand for distillates and gasoline has fallen over the past week, which could signal that high prices are starting to reduce fuel consumption.

Crude inventories (USOILC=ECI) fell 3.4 million barrels in the week of March 25 to 410 million barrels, the lowest since September 2018. The drop was much steeper than the drop in 1 million barrels that analysts had forecast in a Reuters poll.

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The country’s strategic reserve has also fallen by 3 million barrels following announced sales aimed at bolstering global supplies since Russia invaded Ukraine. Oil prices jumped as buyers shunned oil from Russia, the second largest crude exporter behind Saudi Arabia.

Refineries increased crude processing (USOICR=ECI) by 35,000 barrels per day over the past week, increasing overall utilization (USOIRU=ECI) by 1% to 92.1%. U.S. Gulf refinery throughput rates rose to 95.6%, the highest since just before the coronavirus pandemic began in January 2020.

Fuel inventories rose as implied demand, based on supplied product figures, fell across the board. Distillate product supplied fell 16% in the past week, although data is volatile, and gasoline demand fell 1.6% from the previous week. On a four-week moving average basis, demand for distillate and gasoline is down 3.7% and 0.7%, respectively.

“Healthy profit margins appear to be driving refinery activity back up. That said, high product prices are also weighing on consumer demand, which could force refineries to cut operating rates in the coming weeks. “said Kieran Clancy, commodity economist at Capital Economics.

US Gasoline Inventories (USOILG=ECI) rose 785,000 barrels during the week to 238.8 million barrels; analysts had expected a drop of 1.7 million barrels. Distillate (USOILD=ECI) inventories, which include diesel and fuel oil, rose 1.4 million barrels during the week to 113.5 million barrels.

Crude futures were higher on the day. Brent crude gained $2.60, or 2.4%, to $112.83 a barrel while U.S. crude rose $2.83, or 2.7%, to $107.07 at 1:46 p.m. EDT (5:46 p.m. GMT).

US production rose slightly to 11.7 million bpd, the first production increase in two months. Global oil supplies have tightened, with more crude coming out of storage, as production has lagged behind growing demand.

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Reporting by David Gaffen; Editing by David Gregorio

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