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US commercial crude inventories posted an unexpected decline in the week ending 17 October, falling by 1 million barrels to 422.8 million barrels, according to the latest Energy Information Administration (EIA) data. The drawdown, which leaves stockpiles about 4% below the five-year average, signals a tightening supply environment even as import levels rose week on week.

Crude imports climbed by 393,000 barrels per day (bpd) to 5.9 million bpd, while exports slipped by 263,000 bpd to 4.2 million bpd. The inventory draw — despite higher inflows and softer exports — points to stronger refinery pull as the main driver. Over the past month, average crude imports have been 4.6% lower year on year, could point towards refiners’ ongoing preference for domestic grades amid shifting global arbitrage economics.

Domestic output edged down marginally by 7,000 bpd to 13.6 million bpd, remaining near multi-year highs.

Refinery utilisation rebounded sharply as operators ramped up runs following maintenance turnarounds. Inputs averaged 15.7 million bpd, up by 601,000 bpd from the prior week, pushing utilisation to 88.6%. The uptick in throughput directly accounts for much of the crude draw, reinforcing the view that the market remains fundamentally balanced rather than undersupplied.

On the demand side, total products supplied — a proxy for US fuel consumption — averaged 20.5 million bpd over the past four weeks, down just 0.1% from a year earlier. Gasoline demand slipped 3.6%, reflecting weaker mobility trends as temperatures cool, while distillate demand rose 0.2%, supported by resilient freight and industrial activity. The data point to steady underlying consumption, though with a clear seasonal shift toward heavier fuels.

Written: Farid Muzaffar