Key data from the EIA report:
- Crude oil inventories: +0.095 million barrels (forecast: +1.5-1.9 million bbl; API: +4.2 million bbl)
- Gasoline inventories: -2.536 million barrels (forecast: -1 million bbl)
- Distillate inventories: -2.228 million barrels (forecast: -1.7 million bbl)
- Cushing inventories: +1.176 million barrels
- Refinery utilization: 97.4% (+0.2 percentage points against an expected decrease of 0.5 percentage points)
- US crude oil production: 13.843 million b/d (+13 thousand b/d)
- Crude oil imports: -435 thousand b/d
Crude oil inventories are within the 5-year range, but the fuel market remains very tight. Source: Bloomberg Finance LP, XTB
Commentary
The latest DOE report on US crude oil inventories has signaled continued strong demand for fuels and, at the same time, a significantly smaller increase in crude oil stocks, not only compared to market expectations but also to yesterday's API report.
However, the main highlight of the publication was the deep 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 tightened the already strained balance on the side of finished fuels. These declines occurred despite very high refinery activity, as their utilization rate unexpectedly rose to 97.4%, reaching seasonal highs on the Gulf Coast. This testifies to persistent strong demand that exceeds the current processing capacity of the American refining sector.
Oil prices returned to slight gains even before the start of the session in the US and continue to move upwards after the publication of the inventories. A clear reaction can also be seen in the fuel market, as futures contracts for diesel and gasoline are dynamically expanding their already high premiums (crack spreads) over oil prices.
The crude oil market is rebounding by about $2 from the daily low, despite Donald Trump's assurances that the situation is under control, and prices are clearly falling. Source: xStation5
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