Crude Oil Inventories Plummet as US Refineries Run Hot

The US Energy Information Administration (EIA) released its weekly report on oil and product inventories, revealing a significant drop in commercial crude oil inventories. The report showed that crude oil stocks fell by 7.2 million barrels to 404.5 million barrels, which is about 7% below the 5-year average. This decline was driven by lower imports, higher exports, and increased refinery throughput.

The Strategic Petroleum Reserve (SPR) also saw a drop of 3.8 million barrels to 307.7 million barrels due to continued releases from emergency reserves. Refinery activity remained high, with utilization capacity increasing by 1.1 percentage points to 97.2%. This is despite forecasts predicting a decline in utilization.

The EIA data points to sustained tension on the supply side in the US, with commercial crude oil inventories approaching their lower limits for this time of year. The high level of refinery utilization and rising exports limit the US fuel security buffer.