U.S. oil inventories shrunk for a second consecutive week despite a demand drop amid a gradual recovery in economic activity and mixed coronavirus vaccine rollouts.

In its Weekly Petroleum Status Report (WPSR), the U.S. Energy Information Administration (EIA) said Wednesday crude inventories for the week ended April 2 — excluding those in the Strategic Petroleum Reserve — decreased by 3.5 million bbl from the previous week. At 498.3 million bbl, U.S. stocks held 2% above the five-year average.

U.S. crude production averaged 10.9 million b/d last week, down 200,000 b/d from the prior week and 2.2 million b/d below the 2020 peak reached in the March 13 week last year, just prior to the pandemic’s full impact in the Lower 48.

U.S. refinery utilization inched up to 84.0% last...