US gasoline inventories saw an unexpected decline in the week ended June 18 as implied demand tested pandemic-highs and imports plunged, US Energy Information Administration data showed June 23.

Total US gasoline stocks fell 2.93 million barrels to 240.05 million barrels, EIA said, leaving inventories around 0.7% behind the five-year average, in from a surplus of 0.4% seen during the week prior.

The draw comes as total product supplied for gasoline, EIA's proxy for demand, climbed nearly 1% to a four-week-high 9.44 million b/d, testing highs last seen in February 2020 prior to the first wave of pandemic lockdowns.

Apple Mobility data shows US driving activity pushed to around 164% of the index's January 2020 baseline in the week ended June 18, up six percentage points from the week prior and a fresh record high for the data set.

Meanwhile total gasoline imports fell to 840,000 b/d, down 20% on the week and the lowest since the early April, while exports edge 60,000 b/d higher to 895,000 b/d.

Most market watchers had expected US gasoline stocks to have climbed last week amid an uptick in refinery utilization.

American Petroleum Institute data released late June 22 showed a 956,000-barrel build in gasoline stocks in the week ended June 18, while analysts surveyed by S&P Global Platts on June 21 saw stocks moving 1.3 million-barrels higher over the same period.

NYMEX RBOB futures moved sharply higher following the data release, with the front-month July contract settling up 4.26 cents at $2.2669/gal -- the highest since May 22, 2018.

Total refinery net crude demand unexpectedly slipped 230,000 b/d to 16.11 million b/d as utilization rates eased to 92.2% of total capacity, in from 92.6% seen the week prior.

Despite the overall lower refinery runs, weekly adjusted gasoline production climbed more than 4% to 10.33 million b/d -- marking the first time production has averaged above 10 million b/d since December 2019, and the highest since the week ended Sept. 6 of that year.

Gasoline draws were concentrated mainly on the US Gulf Coast, where stocks declined 4.28 million barrels to 85.52 million barrels, while inventories climbed in most other regions.

The US Atlantic Coast saw a counter seasonal 55,000-barrel gasoline build, pushing stocks to the highest since late February at 68.89 million barrels and padding the surplus to the five-year average to 1.4%. Midwest stocks climbed 980,000 barrels to 49.61 million barrels, an 11-week high.

Total US distillate stockpiles climbed 1.75 million barrels to 137.95 million barrels.

Crude stocks see pressure from rising demand, sideways production

Total US crude stocks saw their largest weekly draw since late April, falling 7.61 million barrels to 459.06 barrels, EIA said, leaving them nearly 6% behind the five-year average.

NYMEX August WTI settled 23 cents higher at $73.08/band ICE August Brent climbed 38 cents to settle at $75.19/b.

Despite the pullback in refinery crude demand net, inputs remain very strong compared with production levels. Refinery crude demand was last above the 16 million b/d level in February 2020, when weekly production averaged around 13 million b/d. But production in recent weeks has averaged closer to 11 million b/d.

While refiners have in recent weeks increasingly looked to fill this gap with imports, which hit an 11-month high 6.94 million b/d last week, a corresponding uptrend in exports has left the four-week moving average of US net imports only around 4.5% above where it was during early spring.

Taken together this has resulted in significant downward pressure on US crude stocks, despite refinery crude demand having failed to top the five-year average since the week ended Feb. 28, 2020.

Total US crude stocks have moved lower in ten of the past 13 weeks and are now nearly 44 million barrels below their most recent peak in mid-March.