US Oil stocks drop by nearly 10 million barrels: EIA

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US crude stocks fell by nearly 10 million barrels last week, the most in nearly two years, as refiners processed a record amount of crude and exports also hit an all-time high, the Energy Information Administration said on Wednesday.

The rise in export demand to 3 million barrels a day, coupled with heavy demand from refineries, brought supply down by 9.9 million barrels, with sharp drawdowns in the Midwest, the Gulf and the West Coast, the three US regions with the most storage.

Overall, stocks fell by 9.9 million barrels to 416.6 million barrels, the lowest since January, far exceeding expectations for a decrease of 2.6 million barrels.

On Tuesday, industry group American Petroleum Institute reported a 9-million-barrel draw, but its numbers are not always a precursor to the government figures.

Oil prices spiked after the report, with Brent crude rising 2 percent to $77.84 a barrel, the highest since May 31, while US crude was up $1.93 a barrel, or 2.8 percent, to $72.46 a barrel, the highest for the US benchmark since May 22.

Refinery crude runs rose by 115,000 barrels per day, EIA data showed. Refinery utilization rates were up by 0.8 percentage points, increasing to 97.5 percent, the highest since 2001. Refiners processed 17.8 million bpd in the most recent week, a new record.

"You are seeing the market react to a situation where the market is going to be very tight right now as refiners really ramp up to meet demand," said Phil Flynn, analyst with Price Futures Group in Chicago.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 2.7 million barrels, EIA said, due in part to an outage at a Syncrude facility in Canada that is keeping barrels from getting to Cushing. That may continue to keep markets tight in the coming weeks, traders said.

"Next week, you are going to have a Cushing storage number that includes seven days of the Syncrude outage. The math there would imply that you get an even bigger draw than this week," said Bob Yawger, director of energy futures at Mizuho.

Gasoline stocks rose by 1.2 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3-million-barrel gain.

Distillate stockpiles, which include diesel and heating oil, were up by 15,000 barrels, versus expectations for a 774,000-barrel increase, the EIA data showed.

Net US crude imports fell last week by 512,000 barrels per day.