US Crude Inventories Surge Less Than Expected

The latest report from the US Energy Information Administration (EIA) shows that crude oil inventories increased by only 95,000 barrels, significantly lower than the expected range of 1.5-1.9 million barrels.

This modest increase in inventory is a welcome sign for the market, as it suggests continued strong demand for fuels. However, the real story lies in the sharp decline in refined product stocks.

The loss of gasoline inventories of over 2.5 million barrels and distillates of 2.2 million barrels was much larger than expected and further tightens the balance on the side of finished fuels. This occurred despite very high refinery activity, with utilization rates reaching seasonal highs on the Gulf Coast.

Oil prices have responded positively to this news, rebounding by about $2 from their daily low. Futures contracts for diesel and gasoline are also seeing a surge in premiums over oil prices, indicating a strong market reaction.