U.S. crude oil inventories saw an unexpected rise of 10.9 million barrels for the week ending October 4, according to data from the American Petroleum Institute (API). This surge far surpassed analysts’ predictions of a 1.95-million-barrel build.
The previous week had shown a different trend, with the API reporting a decrease of 1.5 million barrels in crude inventories. So far this year, U.S. crude oil stocks have only dropped by 5 million barrels, based on API’s year-to-date data.
On Tuesday, the Department of Energy (DoE) announced that crude oil inventories in the Strategic Petroleum Reserve (SPR) increased by 0.3 million barrels as of October 4, bringing total SPR stocks to 382.9 million barrels. This marks a recovery of more than 35 million barrels since last summer’s multi-decade low, though the current level is still 252 million barrels lower than when President Biden took office. At the current rate of replenishment, it could take over five years to restore the SPR to January 2020 levels.
Despite these inventory movements, oil prices declined sharply, ignoring fears of potential supply disruptions amid ongoing tensions in the Middle East. Both Brent crude and West Texas Intermediate (WTI) saw significant drops as traders took profits from the recent oil rally, focusing instead on weak demand signals from China.
As of 3:39 p.m. ET, Brent crude was down $3.46, or 4.28%, trading at $77.47 per barrel. This still marked a nearly $4 per barrel gain compared to the same time last week. WTI, the U.S. benchmark, also fell, trading down by $3.29, or 4.26%, at $73.85 per barrel, which represents a $3.70 increase from last Tuesday.
In other inventory news, gasoline stocks fell by 557,000 barrels, a contrast to last week’s 900,000-barrel increase. Gasoline inventories are currently 1% below the five-year average for this time of year, according to the latest data from the Energy Information Administration (EIA).
Distillate inventories continued to decline, dropping by 2.59 million barrels after a 2.7-million-barrel reduction the previous week. Distillate levels remain about 8% below the five-year average, based on EIA data from the week ending September 27.
Meanwhile, Cushing, Oklahoma—home to the crucial delivery point for U.S. crude futures—saw its inventories increase by 1.359 million barrels, following a 700,000-barrel build the previous week. Current Cushing stock levels are just under 24 million barrels.
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