According to the most recent data released by the Energy Information Administration (EIA), U.S. crude oil inventories saw a larger-than-expected decline last week. However, stocks of gasoline and diesel continued to rise.
Crude Oil Stocks
Commercial crude oil stocks, excluding the Strategic Petroleum Reserve (SPR), fell by 2.5 million barrels to 429.9 million barrels in the week ending on January 12th. This level is approximately 3% below the five-year average for this time of year. Analysts surveyed by The Wall Street Journal had predicted a smaller decline of 900,000 barrels.
Meanwhile, storage in the SPR increased by 596,000 barrels to reach 355.6 million barrels.
Additionally, oil stored at Cushing, Okla., which serves as the Nymex delivery hub, decreased by 2.1 million barrels to 32.1 million barrels.
Refineries
Refineries reduced their capacity use from 92.9% to 92.6% compared to the previous week. Expectations were for a smaller decrease of 0.6 percentage points.
Crude Futures
Crude futures experienced an upward trend due to the latest report from the International Energy Agency (IEA) stating that oil demand is projected to grow by 1.2 million barrels per day this year. This estimate is higher than the previously forecasted 1.1 million barrels per day outlined in the December report. However, it is still lower than the anticipated 1.5 million barrels per day increase in oil supply for this year. As a result, the Nymex crude contract for February increased by 1.3% to $73.53 a barrel, while the international benchmark Brent rose by 0.8% to $78.52 a barrel.
Gasoline and Diesel Stocks
U.S. gasoline stocks experienced a rise of 3.1 million barrels last week, reaching 248.1 million barrels. This exceeded the expectations of a 2.5 million-barrel increase according to a survey conducted by The Wall Street Journal. Gasoline inventories are currently slightly above the five-year average, as reported by the EIA.
Furthermore, distillate stocks, mainly consisting of diesel fuel, increased by 2.4 million barrels to 134.8 million barrels. Although this is around 3% below the five-year average, it was higher than the anticipated increase of 600,000 barrels in distillate stocks.
Summary of U.S. Oil Inventory Changes – Week Ended Jan. 12:
- Crude: -2.5 million barrels
- Gasoline: +3.1 million barrels
- Distillates: +2.4 million barrels
- Refinery Use: -0.3 percentage points
Note: Numbers are given in millions of barrels, except for refinery use, which is expressed in percentage points.
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