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Surprising Crude and Product Draws Push Oil Prices Higher

by Krystal

Crude oil inventories in the United States dropped by 573,000 barrels for the week ending October 25, as reported by the American Petroleum Institute (API). This figure contrasts sharply with analysts’ expectations of a 2.3 million-barrel increase.

In the previous week, the API had indicated a rise of 1.643 million barrels in crude inventories.

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Since the beginning of the year, crude oil inventories have decreased by over 6 million barrels, according to API data. Meanwhile, the Department of Energy (DoE) reported that crude oil in the Strategic Petroleum Reserve (SPR) increased by 1.2 million barrels as of October 25. The SPR now holds 385.8 million barrels, which is about 38 million barrels more than last summer’s multi-decade low, but still down 249 million barrels since President Biden took office.

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As of 4:30 PM ET, Brent crude was trading slightly lower at $71.26, down $0.16 (-0.22%) for the day, marking a decline of approximately $4.50 per barrel from the same time last week. The U.S. benchmark, West Texas Intermediate (WTI), also fell by $0.08 (-0.12%) to $67.30, down nearly $5 per barrel compared to last Tuesday.

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In addition, gasoline inventories decreased by 282,000 barrels this week, following a significant drop of 2.019 million barrels the previous week. Currently, gasoline inventories are 3% below the five-year average for this time of year, according to the latest data from the Energy Information Administration (EIA).

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Distillate inventories also saw a decline, falling by 1.463 million barrels on top of last week’s decrease of 1.478 million barrels. Distillate levels are now approximately 9% below the five-year average as of the week ending October 18, the latest EIA data shows.

Furthermore, Cushing inventories, which represent the benchmark crude stored in Cushing, Oklahoma, rose by 320,000 barrels, in contrast to the previous week’s draw of 216,000 barrels, according to API data.

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