US Crude, Gasoline Stocks Drop Sharply Amid Refinery Surge


Last week, commercial crude stockpiles in the United States experienced an unexpected decline, as revealed by government data on Wednesday. The Energy Information Administration reported that inventories of crude, excluding the strategic petroleum reserve, fell by 3.4 million barrels to 445.1 million barrels for the week ending July 5. This was contrary to the Bloomberg consensus estimate, which had anticipated a build of 1 million barrels.

In tandem with the crude stockpile decline, total motor gasoline inventories also dropped by 2 million barrels. On the other hand, distillate fuel stocks saw a significant increase of 4.9 million barrels, while propane and propylene inventories rose by 2.2 million barrels, placing them 12% above the five-year average for this period. Total commercial petroleum inventories saw an overall advance of 2.6 million barrels for the week.

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Refinery activity showed a marked upturn, with crude-oil refinery inputs averaging 17.1 million barrels per day, which was 317,000 barrels more than the previous week’s average. Refineries operated at 95.4% of their capacity, up from 93.5% the week before. This activity left crude stocks about 4% below the five-year average for this time of year.

Gasoline production increased, averaging 10.3 million barrels per day, up from the previous week’s 10.1 million barrels per day. Distillate fuel output saw a slight rise, maintaining an average of 5.1 million barrels per day.

Market reactions followed, with West Texas Intermediate futures climbing 1% to $82.27 per barrel in afternoon trading, and Brent crude rising 0.7% to $85.28 per barrel.

Meanwhile, the Organization of the Petroleum Exporting Countries kept its forecasts for global oil demand growth unchanged in its July monthly oil market report, projecting an increase of 2.2 million barrels per day in 2024 and 1.8 million barrels per day in 2025.