EIA: US crude stocks plunged as supply tightens and refinery runs rise

US commercial crude inventories fell 8.6 million barrels to 415.6 million barrels in the week ended October 9, the EIA said, far exceeding market expectations for a draw of 288,000–1.09 million barrels or a small build of 100,000–200,000 barrels. The decline left crude stocks 3% below the five-year average, marking a sharp tightening in the US crude balance.

Crude imports fell 791,000 barrels a day to 6.0 million b/d, while exports declined 195,000 b/d to 4.7 million b/d. The larger import decline reduced net imports by approximately 596,000 b/d, lowering the volume of crude entering the country on a net basis. Domestic production also fell 300,000 b/d to 13.7 million b/d, further limiting supply.

Refinery crude runs rose 135,000 b/d to 16.6 million b/d, lifting capacity utilization to 93.5%. Higher processing rates increased crude demand at the same time that domestic production and net imports declined, reinforcing the drawdown. The scale of the inventory decline suggests that the combined supply and refinery factors exerted substantial pressure on crude stocks during the week.

The product balance offered a contrasting signal. Total motor gasoline inventories rose 3.5 million barrels, although stocks remained 4% below the five-year average. The build indicates that the crude draw did not translate into tighter gasoline inventories, highlighting a divergence between crude availability and downstream product balances.

The latest figures point to a considerably tighter crude market, with lower domestic production and reduced net imports coinciding with stronger refinery demand. However, the gasoline build tempers the broader picture, suggesting that supply pressure remained more pronounced in crude than in finished products.

Written by: Farid Muzaffar