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U.S. crude oil stockpiles fell more than anticipated last week and fuel inventories fell unexpectedly as implied consumer demand surged to an all-time high, the Energy Information Administration said on Wednesday.

Crude inventories fell by 4.6 million barrels in the week to Dec. 10 to 428.3 million barrels, more than double expectations in a Reuters poll for a 2.1 million-barrel drop.

Product supplied by refineries, a proxy for demand, surged in the most recent week to 23.2 million barrels per day (bpd), due to gains in gasoline, diesel and other refined products. The less volatile four-week average is currently 21.3 million bpd – ahead of pre-pandemic levels.

“Implied product demand has been exceptionally strong, as retailers prepare for a busier holiday season,” said Matt Smith, lead oil analyst for the Americas at Kpler.

The decline in crude stocks was in part due to a sharp increase in exports, which rose to 3.6 million bpd, reducing net U.S. crude imports by 1.4 million bpd to 2.8 million bpd.

The sharp drop-off in imports may be in part due to year-end tax considerations, as many states and localities assess taxes on crude inventories held at the end of the year. As a result, companies look to ramp up exports and hold down imports to reduce their stocks, Smith said.

“Strong oil exports and subdued imports on the U.S. Gulf Coast have helped encourage a chunky draw to total oil inventories, as ad valorem tax considerations get under way,” he said.

The decline in overall commercial crude stocks came even as the United States made good on its announcement to release inventories from the national strategic reserve, which fell to its lowest level since late 2002.

U.S. gasoline stocks fell 719,000 barrels in the week to 218.6 million barrels, compared with expectations for a 1.6 million-barrel rise. Distillate stockpiles, which include diesel and heating oil, fell by 2.9 million barrels versus expectations for a 688,000-barrel rise, the EIA data showed.

Refinery crude runs fell by 115,000 bpd last week, EIA said. Refinery utilization rates were unchanged at 89.8 per cent of nationwide capacity.

Oil futures pared their losses after the data, with U.S. crude down 64 cents, a 0.9 per cent decline, to $70.09 a barrel as of 10:49 a.m. EST (1549 GMT), while Brent 52 cents, or 0.7 per cent, lower on the day at $73.15 a barrel.

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