US Crude Stocks Edge Lower Amid Rising Production and High Oil Prices

US crude oil inventories have edged lower this week, according to data from the American Petroleum Institute (API). The API estimated that US crude oil stocks fell by 300,000 barrels in the week ending September 4, compared to a loss of 2.6 million barrels in the previous week.

However, when looking at commercial inventories excluding the Strategic Petroleum Reserve (SPR), the picture is more complex. These stocks have lost around 48 million barrels over the last 21 weeks, but are still up 2.8 million barrels for the year, according to API data.

The SPR has been a key factor in keeping US crude inventories in check, with 1.2 million barrels drawn from the reserve this week to aid commercial stocks. This brings the total inventory held in the SPR to 285.4 million barrels, which is still shy of its maximum capacity by around 446 million barrels.

The generally accepted operational minimum for oil in the SPR is between 250-300 million barrels, below which the reserve may struggle to pump and process oil efficiently. Despite this, US crude production has been rising, with output increasing to 13.862 million barrels per day (bpd) in the week ending August 28.

The price of oil remains high, with WTI trading up $3.41 per barrel (+3.67%) at $96.44 on Wednesday, while US crude was trading at $101.46 (+3.62%), a gain of nearly $6 per barrel from last week's levels.