UPDATE 2-Crude oil inventories slump the most since April as imports fall

(Adds additional detail on imports from Canada, updates prices)
May 25 (Reuters) - U.S. crude inventories slumped last week,
the biggest weekly drop in seven weeks, as imports dropped and
refiners cut output, while gasoline stocks soared ahead of the
start of the U.S. driving season, the government said on
Wednesday.
Crude inventories USOILC=ECI fell 4.2 million barrels in
the week to May 20, compared with analyst expectations for an
decrease of 2.5 million barrels, according to the Energy
Information Administration.
U.S. crude imports USOICI=ECI fell last week by 362,000
barrels per day.
The report showed a surprising rebound in supplies from
Canada, as weekly imports rose to 3.09 million bpd, from the
previous week's 2.59 million bpd, despite Canadian oil sands
shutdowns at the start of the month amid a massive wildfire.

However, traders said they expect further declines in
Canadian imports in the coming weeks, as it takes about a month
to move crude from Canada to the U.S. Midwest.
Crude stocks at the Cushing, Oklahoma, delivery hub for
futures USOICC=ECI fell 649,000 barrels, EIA said.
The report at face value was bullish, but the upside had
already been priced in, traders said, after the industry group
the American Petroleum Institute Tuesday reported a 5.1
million-barrel drawdown. API/S
"We wouldn't be surprised to see more profit taking from the
longs, especially since there was no immediate follow-through in
buying after the data," said Tariq Zahir, trader and managing
partner at Tyche Capital Advisors in Laurel Hollow, New York.
After the data, U.S. crude futures CLc1 hit a high of
$49.62 a barrel and by 10:51 a.m. Eastern (1451 GMT), was
trading up 38 cents at $49. Brent crude LCOc1 was 65 cents
higher at $49.26 after touching $49.69 after the report.
Refinery crude runs USOICR=ECI fell 92,000 bpd as
utilization rates USOIRU=ECI fell by 0.8 percentage point to
89.7 percent of total capacity.
The EIA said gasoline stocks USOILG=ECI rose 2.0 million
barrels, versus forecasts for a 1.1 million-barrel drop and the
API's report of a 3.6 million-barrel build.
"Gasoline looks to be the weakest horse right now and the
momentum of the recent rally that started on May 10 now looks to
be breaking down," said David Thompson, executive vice-president
at commodities broker Powerhouse in Washington.
Refiners usually build up supplies of gasoline ahead of
summer driving season.
Distillate stockpiles USOILD=ECI , which include diesel and
heating oil, fell 1.3 million barrels, versus expectations for a
1.1 million barrels drop. East Coast distillate stocks reached
their highest, seasonally, since 2010, according to the EIA.