P.M. BRIEFING : Refineries Busy but Supplies Slip

U.S. oil refineries last week operated at their highest level so far this year even though gasoline production slipped slightly from its 10-year high, the American Petroleum Institute said.

For the week ended July 7, API’s weekly statistical report showed the nation’s refineries operated at 92.5% of capacity, compared with 91.2% a week earlier and 86.5% a year ago.

Gasoline supplies last week dropped markedly to 215 million barrels from 220.2 million barrels in the prior week but stayed ahead of year-ago levels of 208.5 million barrels. The API spokesman noted the week included the July Fourth holiday, saying a 5-million-barrel decline should not be viewed as extraordinary in a summer week that includes a long weekend.

The drop may help drive up gasoline prices on the New York Mercantile Exchange, however, because some traders had only expected a gasoline inventory drop of 1 million to 2 million barrels.