According to the U.S. Energy Information Administration (EIA), U.S. crude oil inventories experienced a larger-than-anticipated decrease last week. This decline was primarily driven by U.S. refiners ramping up their capacity utilization after the maintenance season.
The EIA reported that commercial crude oil stockpiles, excluding the Strategic Petroleum Reserve, dropped by 4.6 million barrels in the week ending on December 1st, reaching a total of 445 million barrels. Importantly, this figure is approximately 1% below the five-year average for this time of year. More notably, this marks the first decline in stocks in seven weeks.
Analysts surveyed by The Wall Street Journal had initially predicted a more modest decrease of 1 million barrels for last week's crude stockpiles.
In contrast, oil supplies at Cushing, Oklahoma— the delivery hub for the New York Mercantile Exchange (Nymex)— increased from 27.7 million barrels to 29.6 million barrels compared to the previous week. Additionally, U.S. crude oil production decreased by 100,000 barrels per day to reach 13.1 million barrels per day. Furthermore, imports averaged 7.5 million barrels per day, marking a 1.7 million increase from the previous week, while exports declined by 416,000 barrels per day to total 4.3 million barrels per day, as reported by the EIA.
Meanwhile, storage in the Strategic Petroleum Reserve (SPR) experienced a slight rise of 330,000 barrels, bringing the total to 351.9 million barrels.
Following the release of this data, crude oil futures witnessed further losses due to lingering concerns about weakening demand and potential oversupply. Doubts about the commitment to additional output cuts announced by the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, has added to market uncertainty.
Oil Prices Decline
The crude oil market experienced a decline in prices, with the Nymex front-month crude contract for January dropping by 3.7% to $69.65 a barrel, and Brent for February delivery falling by 3.2% to $74.75 a barrel.
Increase in Gasoline Stockpiles
According to the Energy Information Administration (EIA), gasoline stockpiles rose by 5.4 million barrels last week, reaching a total of 223.6 million barrels. Despite this increase, the stockpiles remained approximately 1% below the five-year average. Analysts surveyed by the Wall Street Journal had expected a smaller increase of 700,000 barrels.
Rise in Gasoline Demand
Gasoline supplied, which serves as an indicator of demand, witnessed a rise of 260,000 barrels per day, reaching a total of 8.5 million barrels per day, as reported by the EIA.
Increase in Distillate Stocks
Distillate stocks, primarily comprising diesel fuel, increased by 1.3 million barrels to reach 112 million barrels as of December 1st. This build was slightly higher than the anticipated 1 million barrels, yet it remained 13% lower than the five-year average.
Refining Capacity Utilization
The utilization rate of refining capacity experienced a rise of 0.7 percentage points, reaching 90.5%. However, this level was still five percentage points below the rate observed in the same period last year. The forecast had predicted a slightly higher increase of 0.8 percentage points.
Change in U.S. Oil Inventories
The data from the EIA indicated changes in U.S. oil inventories for the week ended December 1st: Crude: -4.6 million barrels; Gasoline: 5.4 million barrels; Distillates: 1.3 million barrels; Refinery Use: 0.7 percentage points.
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