US Crude Oil Inventories Register Significant Draw

US crude oil inventories declined by an estimated 11.12 million barrels in the week ending 9 October, according to data from the American Petroleum Institute (API). This follows a decrease of 2.09 million barrels in the previous week.

Commercial crude oil inventories, excluding the Strategic Petroleum Reserve (SPR), have decreased by over 51 million barrels in the last 26 weeks. Despite these draws, API data indicates that US crude inventories remain at approximately the same level as at the start of the year, partly maintained by releases from the SPR.

Strategic Petroleum Reserve and Production

For the week ending 9 October, no barrels were released from the SPR. The total inventory held in the SPR remained at 283 million barrels, which is 431 million barrels below its maximum capacity. The generally accepted operational minimum for the SPR is between 250 million and 300 million barrels, as below this level, efficient pumping and processing of oil may become challenging.

US crude oil production increased to 13.979 million barrels per day (bpd) in the week ending 2 October, up from 13.955 million bpd in the preceding week. This represents an increase of 350,000 bpd compared to the same period a year earlier.

Product Inventories and Market Prices

In the week ending 7 October, gasoline inventories rose by 1.1 million barrels, contrasting with a 1.37 million barrel decline in the week prior. According to the latest EIA data referenced by OilPrice.com, gasoline inventories were 6% below the five-year average for that time of year.

Distillate inventories decreased by 1.5 million barrels, following a rise of 461,000 barrels in the previous week. Distillate inventories were reported to be 12% below their five-year average going into the reporting period. Inventories at Cushing, Oklahoma, the delivery hub for the WTI Crude futures contract, increased by 1.823 million barrels, building on an 866,000-barrel gain in the week prior.

Brent crude was trading at $106.02 per barrel, marking a $5 per barrel increase from the previous week. West Texas Intermediate (WTI) crude traded at $95.75 per barrel, an increase of nearly $6 per barrel over the same period, as reported by OilPrice.com.