News

U.S. Crude Inventories Decline, Gasoline and Distillate Stocks Rise

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4.5

Andrew R. Michaud

• December 13, 2023

Overview

The U.S. Energy Information Administration (EIA) reported that crude oil inventories in the United States experienced a second consecutive week of declines, while stocks of gasoline and distillate fuel saw an increase. According to the EIA, commercial crude-oil stockpiles, excluding the Strategic Petroleum Reserve, dropped by 4.3 million barrels to reach 440.8 million barrels in the week ended December 8. This figure is approximately 2% below the five-year average for the same week.

Crude Oil Stockpiles

Analysts surveyed by The Wall Street Journal had predicted a draw on crude inventories of 1.2 million barrels. However, the actual decline was much larger than anticipated. The inventory at Cushing, Oklahoma, which serves as the delivery hub for Nymex, saw an increase of 1.2 million barrels, reaching a total of 30.8 million barrels.

Refinery Capacity

Refineries reduced their capacity utilization rate to 90.2% from the previous week's 90.5% and the rate of 92.2% recorded a year earlier. This contradicted expectations outlined in The Wall Street Journal survey, which predicted a 0.3 percentage-point increase to 90.8%.

Production, Imports, and Exports

U.S. crude oil production remained unchanged at 13.1 million barrels per day. However, imports showed a decline of nearly 1 million barrels per day to reach 6.5 million barrels per day. Additionally, exports declined by 568,000 barrels per day to a level of 3.8 million barrels per day.

Oil Futures

After a sell-off that caused oil futures to reach a more than five-month low in the previous session, prices rebounded on Wednesday. The Nymex front-month WTI contract for January experienced a 0.7% increase, reaching $69.08 per barrel. Likewise, Brent for February rose by 0.8% to $73.80 per barrel.

As the EIA continues to monitor inventories and market trends, future fluctuations in oil prices and stockpiles will likely impact the energy sector. Stay updated for further developments.

OPEC Remains Optimistic about World Oil Demand

The Organization of Petroleum Exporting Countries (OPEC) has released its monthly report projecting a growth in world oil demand. Despite concerns surrounding demand and falling prices, OPEC maintains a positive outlook, describing the concerns as "exaggerated."

OPEC expects global oil demand to increase by 2.2 million barrels per day next year, reaching a total of 104.4 million barrels per day. This steady growth indicates a strong demand for oil in the coming year.

Meanwhile, in the United States, gasoline stockpiles have seen a significant increase. Last week, stockpiles rose by 409,000 barrels to a total of 224 million barrels. This surpasses expectations of a 1.9 million-barrel increase.

Although gasoline stocks are currently 2% below the five-year average for the week, the Energy Information Administration (EIA) reports that gasoline supplied rose by 394,000 barrels per day to a daily total of 8.9 million barrels. This indicates a positive indicator of demand.

Distillate fuel stocks, primarily diesel fuel, also saw a rise of 1.5 million barrels to a total of 113.5 million barrels. However, these stocks remain 13% below the five-year average.

Analysts initially predicted an increase of 400,000 barrels in distillate fuel inventories, but the actual rise exceeded expectations.

Here is a summary of the change in U.S. oil inventories for the week ending December 8:

• Crude: -4.3 million barrels
• Gasoline: 0.4 million barrels
• Distillates: 1.5 million barrels
• Refinery Use: -0.3 percentage points

Overall, these developments highlight the ongoing dynamics of the oil market, emphasizing the importance of closely monitoring supply and demand in the coming year.