UPDATE 1-U.S. oil stocks drop as refinery use hits 12-year high

(Updates with additional data, prices, recasts lead, adds quotes)

Aug 9 (Reuters) - U.S. crude stocks fell last week as refineries boosted output to their highest capacity in 12 years, the Energy Information Administration said on Wednesday, but a surprising increase in gasoline stocks cut into gains in oil prices.

Crude inventories fell by 6.5 million barrels in the week to Aug. 4, compared with expectations for a decrease of 2.7 million barrels.

The decline came as refiners boosted overall utilization rates to 96.3 percent of total capacity, the highest since August 2005, according to EIA data. Refiners have been running at high rates due to surprisingly strong distillate demand and heavy demand for U.S. exports.

For the week, refiners processed nearly 17.6 million barrels of crude, the most since the EIA started keeping data in 1982, surpassing a record set in May. Refinery crude runs rose by 166,000 barrels per day.

"Refining activity is nearly a million barrels per day higher than year-ago levels, while imports are well down versus the same period last year," said Matt Smith, director of commodity research at ClipperData.

U.S. crude net imports fell last week by 496,000 barrels per day to 7.1 million bpd. On a four-week moving average basis, imports are down 7 percent from a year ago.

Gasoline stocks, however, rose by 3.4 million barrels, compared with expectations in a Reuters poll for a drop of 1.5 million barrels.

Oil prices were lower, as traders cited the rise in gasoline inventories and an increase in production outside of Alaska for the weakness. Overall production slipped by 7,000 barrels a day to 9.423 million bpd - including a 22,000-bpd drop in Alaska.

"The large increase in gasoline stocks despite robust demand and the continued increase in oil production outside Alaska should limit price gains," said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.

U.S. crude futures were up 18 cents to $49.35 a barrel, off the day's high of $49.65 a barrel, as of 11:00 a.m. EDT (1500 GMT). Brent futures were up 27 cents to $52.39 a barrel, also off the day's highs.

Distillate stockpiles, which include diesel and heating oil, fell by 1.7 million barrels, versus expectations for a drop of 131,000 barrels, the EIA data showed.

Crude stocks at the Cushing, Oklahoma, delivery hub rose by 569,000 barrels, EIA said. (Reporting by David Gaffen; Additional reporting by Scott DiSavino and Ethan Lou; Editing by Paul Simao)