U.S. crude oil stockpiles rose unexpectedly last week, while gasoline drew down on the back of strong driving demand ahead of the July 4 weekend.

Crude inventories rose by 7.1 million barrels to 426 million barrels in the week ended July 4, the EIA said, compared with analysts’ expectations in a Reuters poll for a 2.1 million-barrel draw.

Included in the rise was a 1.8 million barrels per day (bpd)adjustment figure week-over-week. The adjustment figure looks at “unaccounted for crude oil,” and serves as a balancing item for the EIA.

“Overall demand jumped back up, so the market is taking the build in crude supplies as kind of a one-off,” said Phil Flynn, an analyst with Price Futures Group.

Gasoline stocks (USOILG=ECI), fell by 2.7 million barrels in the week to 229.5 million barrels, the EIA said, nearly double expectations for a 1.5 million-barrel draw.

Gasoline demand rose 6% to 9.2 million bpd last week.

“If we look at gasoline demand numbers, they were back up to a respectable number,” Flynn added.

Crude futures pared up some of their losses after the EIA data showing strong fuel demand.

Brent crude futures were down 19 cents, or 0.3%, at $69.96 a barrel by 10:47 a.m. ET (1447 GMT), while U.S. West Texas Intermediate was down 26 cents, or 0.4%, at $68.07 a barrel.

Crude stocks at the Cushing, Oklahoma, delivery hub for WTI (USOICC=ECI), rose by 464,000 barrels, the EIA said.

Distillate stockpiles (USOILD=ECI), which include diesel and heating oil, fell by 825,000 barrels in the week to 102.8 million barrels, versus expectations for a 300,000-barrel drop, data showed.

Refinery crude runs (USOICR=ECI), meanwhile, fell by 99,000 bpd, and refinery utilization rates (USOIRU=ECI), fell by 0.2 percentage point to 94.7% of total capacity.

Net U.S. crude imports (USOICI=ECI), fell by 1.36 million bpd, the EIA said.
Source: Reuters (Reporting by Arathy Somasekhar in Houston Editing by Marguerita Choy)