EIA: Crude and gasoline contract as distillate inventories surge amid elevated refinery runs

US commercial crude inventories fell by 1.7 million barrels in the week ending July 10, lowering total stocks to 409.7 million barrels as refiners accelerated operations and imports held steady. The inventory draw came alongside a 99,000 barrel-per-day (bpd) increase in refinery crude inputs to 17.1 million bpd, lifting utilization rates to 96.2% of operable capacity.

Despite the prompt draw, domestic commercial crude inventories remain approximately 6% below the five-year seasonal average, indicating that underlying structural deficits have yet to be resolved.

On the trade and supply balance, crude imports rose by 60,000 bpd to average 5.7 million bpd, though the four-week average of 5.5 million bpd trails the corresponding period last year by 12.2%. Domestic crude production remained virtually unchanged, holding steady at 13.9 million bpd. Concurrently, volumes within the Strategic Petroleum Reserve (SPR) contracted by 3.0 million barrels, drawing down to 316.5 million barrels as geopolitical balancing efforts continue.

Refining margins and product balances experienced divergence across the barrel. Finished motor gasoline production eased down to 9.6 million bpd, which helped pull total gasoline inventories down by 1.5 million barrels to 210.5 million barrels, leaving gasoline stocks 8% below the five-year average as peak summer driving demand persists.

In contrast, downstream distillate fuel oil production rose to 5.2 million bpd, fueling a substantial 4.6-million-barrel surge in distillate inventories to 108.2 million barrels. While the distillate build temporarily eases product scarcity, overall downstream balances remain highly vulnerable to volatile export demand, keeping stocks roughly 11% below their historical five-year baseline.

Written by: Aiman Haikal