EIA: US crude stockpiles defied expectations to post major draw

US commercial crude inventories fell sharply by 6.9 million barrels in the week ending 17 October to 416 million barrels, defying market expectations for only a minor 211,000-barrel draw, according to the latest data from the Energy Information Administration (EIA). The larger-than-expected decline leaves stockpiles about 6% below the five-year average and underscores resilient US demand even as the summer driving season winds down.

The drawdown came as US crude imports slid by 867,000 barrels per day (bpd) to 5.1 million bpd, while exports rose by 158,000 bpd to 4.4 million bpd — a clear sign that domestic consumption and overseas demand remain firm. Meanwhile, US production edged up by 15,000 bpd to 13.6 million bpd, hovering near record levels. 

Refinery activity moderated slightly as the industry transitions toward winter-grade fuels. Inputs dropped by 601,000 bpd from the previous week, bringing utilisation rates down to 86.6%. Even so, the strong crude draw points to steady end-user demand and continued refinery pull, despite the slight dip in running rates.

The scale of the decline has prompted analysts to reassess earlier expectations of a potential surplus, given record US production and rising OPEC+ output. Instead, the data suggest the market remains tighter than anticipated, with seasonal demand holding firm and inventories continuing to trend below historical norms.

In the weeks ahead, traders will watch closely whether refinery restarts and heating fuel demand sustain further draws, potentially supporting prices amid broader concerns over global growth and supply expansion. Developments in US-China trade talks will also serve as a key indicator of whether oil demand can maintain its strength through year-end.

Written: Farid Muzaffar