UPDATE 1-U.S. crude inventories fall unexpectedly -API

(Adds Cushing data, background, paragraphs 6-10)

NEW YORK, Dec 8 (Reuters) - U.S. crude inventories fell
unexpectedly last week as refiners boosted production of fuels,
the American Petroleum Institute said in a weekly report
released on Tuesday.

Commercial crude oil stockpiles fell 5.8 million barrels in
the week ending Dec. 4, the trade group said. Analysts had
called for a 600,000-barrel build.

Refinery utilization rose 1.3 percentage points to 81.4
percent of capacity in the week to Dec 4.

Weekly crude runs were up 105,000 barrels per day.

"The API report of a huge crude stock drawdown has caught
the market by surprise and that may latch on to the bearish
psychology of the market," said Phil Flynn, analyst at PFGBest
Research in Chicago.

Gasoline inventories fell by 753,000 barrels, while
distillate stockpiles, which include heating oil and diesel,
rose 1 million barrels. Heating oil stocks fell 69,000
barrels.

Weekly product imports fell by 597,000 bpd to 1.86 million
bpd.

Crude oil imports were up 1.1 million barrels per day at
9.54 million bpd, API said. Crude stocks at Cushing, Oklahoma,
the delivery point for crude traded on NYMEX, rose 1.5 million
barrels.

Cushing stocks have been rising steadily for several weeks,
helping to push down the price of front-month NYMEX crude
futures CLc1 and creating the steepest front-month contango
discounts since August.

The federal government's Energy Information Administration
will release its weekly oil statistics on Wednesday at 10:30
a.m. EST (1530 GMT).
(Reporting by Edward McAllister; Editing by David Gregorio)