U.S. crude oil inventories fall, but fuel reserves rise

According to the U.S. Energy Information Administration (EIA), the country’s crude oil inventories declined to 413.9 million barrels over the previous week. The drop of more than 5 million barrels strongly exceeded analysts’ expectations of about a 3.3 million decline. 

At the same time, there was an increase in the U.S. gasoline and distillate stocks last week. It was driven by the highest refinery utilization rate since 2019. The significant rise in inventories wasn’t even affected by increased demand for fuel within the winter period. 

Gasoline reserves grew over 5 million barrels and reached the level of 219.1 million in a week. Distillate reserves grew by 6.2 million barrels to almost 119 million. In both cases, analysts’ expectations weren’t met, as the forecasted growth of petroleum products stocks was about 2.2 million barrels for distillates and 2.7 million barrels for gasoline.

However, Bob Yawger, director of futures division at Mizuho Securities, stressed that although there has been a substantial increase in distillate production, demand for these products continues to decline. In his opinion, that is where the focus should be.