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US crude balances showed a clear loosening in the week ending 20 March, as a sizeable inventory build and a sharp decline in export flows outweighed stronger refinery demand and broadly stable domestic supply, signalling a near-term supply overhang.

Commercial crude inventories (excluding the Strategic Petroleum Reserve) increased by 6.9 million barrels to 456.2 million barrels, surpassing market expectations and leaving stocks marginally, by 0.1%, above the five-year seasonal average. The scale of the build highlights a temporary imbalance, with supply exceeding immediate offtake despite otherwise steady underlying fundamentals.

Domestic production remained largely stable at 13.65 million bpd, easing slightly by 11,000 bpd. Trade flows were the main contributor to the looser balance. Imports averaged 6.46 million bpd, down by 730,000 bpd week on week, although the four-week average held at 6.6 million bpd, up 15.5% year on year, pointing to sustained inbound supply. At the same time, exports fell sharply to 3.32 million bpd from 4.89 million bpd in the previous week, a contraction that directly contributed to the inventory build.

Refinery activity continued to provide some support to overall balances. Crude inputs rose by 366,000 bpd to 16.59 million bpd, lifting utilisation rates to 92.9% of operable capacity. The increase reflects seasonal ramp-ups alongside continued margin support, with refiners maintaining elevated run rates to meet downstream demand.

In refined products, trends diverged from crude fundamentals. Motor gasoline inventories declined by 2.6 million barrels to 241.4 million barrels, despite stronger production, leaving stocks around 3% above the five-year average. The draw suggests resilient end-user demand and steady absorption of higher refinery output.

The overall data set points to softer near-term crude fundamentals, with the inventory build exerting pressure on prompt pricing. At the same time, strong refinery runs and ongoing product draws indicate that underlying demand remains intact. As the market approaches the summer driving season, continued gasoline draws could gradually tighten balances and temper bearish sentiment for crude stocks, while any recovery in exports or supply adjustments may prompt corrective price movements as the market works towards rebalancing.

Written by: Aiman Haikal