EIA: US crude stocks surged on production rebound and rising imports
US commercial crude oil inventories swelled significantly last week, driven by a sharp recovery in domestic production and a jump in foreign inflows, creating a supply overhang that outweighed a pullback in refinery runs.
US commercial crude oil inventories swelled significantly last week, driven by a sharp recovery in domestic production and a jump in foreign inflows, creating a supply overhang that outweighed a pullback in refinery runs. Data from the US Energy Information Administration (EIA) released on Wednesday highlighted a decisive shift in balances following the previous week's draw.
Commercial crude stocks (excluding the Strategic Petroleum Reserve) surged by 8.5 million barrels to 428.8 million barrels in the week ending 6 February. Despite the massive build, inventories remain approximately 3% below the five-year seasonal average for this time of year.
The inventory accumulation was underpinned by a robust recovery in upstream activity. Domestic crude production rebounded by 498,000 barrels per day (bpd) to 13.7 million bpd, nearly erasing the weather-related losses from the prior week. Trade dynamics further loosened balances, as crude oil imports climbed by 604,000 bpd to average 6.8 million bpd. Meanwhile, exports retreated, falling by 308,000 bpd to 3.7 million bpd, reducing the outlet for domestic barrels.
Refinery activity softened, exacerbating the crude build. Crude oil inputs averaged 16.0 million bpd, a decrease of 29,000 bpd from the previous week’s average. Consequently, the refinery utilisation rate dropped by 1.1 percentage points to 89.4% of operable capacity.
Refined product inventories displayed divergent trends. Total motor gasoline stocks increased by 1.2 million barrels to 259.1 million barrels, placing them about 4% above the five-year average. Conversely, distillate fuel inventories fell by 2.7 million barrels to 124.7 million barrels, leaving stocks roughly 4% below seasonal norms. Gasoline production averaged 9.1 million bpd, while distillate production averaged 4.9 million bpd.
Demand indicators remained lackluster. Total products supplied, a proxy for demand, averaged 20.8 million bpd over the last four-week period, up 2.4% from the same period last year. However, core fuel demand softened; motor gasoline product supplied averaged 8.3 million bpd, down 0.7% year-on-year, while distillate fuel product supplied averaged 4.1 million bpd, down 3.2% compared to year-ago levels.
Written by: Aiman Haikal