U.S. crude oil inventories experienced an unexpected decline during the previous week, propelled by a surge in exports and sustained activity among refiners, the Energy Information Administration (EIA) disclosed on Wednesday.
According to the EIA’s report, crude stockpiles dwindled for the second consecutive week, registering a reduction of 2 million barrels to reach 445 million barrels for the week ending March 15. This figure defied projections from analysts surveyed by Reuters, who anticipated a modest uptick of 13,000 barrels.
Concurrently, gasoline reserves continued their downward trajectory for the seventh consecutive week, plummeting by 3.3 million barrels to 230.8 million barrels, surpassing analysts’ predictions of a 1.3 million-barrel decline.
Specifically, gasoline inventories on the Gulf Coast plummeted by 1.82 million barrels to 76.58 million barrels, marking the lowest level observed in three years, according to EIA data.
Following the release of the report, oil futures experienced broadened losses, with Brent crude dropping by $1.45, or 1.7%, to $85.93 a barrel, and U.S. crude sliding by $1.77, or 2.1%, to $81.70 per barrel by 11:19 a.m. EST (1519 GMT).
Despite the downward trend in inventories, oil prices continued to falter, partly attributed to weakened gasoline demand, as noted by Bob Yawger, director of energy futures at Mizuho. Yawger emphasized, “The rally we’ve seen in the past few weeks has been partially because of gasoline but those fundamentals aren’t quite as strong.”
Notably, the demand for finished motor gasoline showed a decline of 235,000 barrels per day, dropping below 9 million barrels per day for the first time in three weeks.
Moreover, crude oil exports witnessed an uptick of 1.7 million barrels per day to 4.8 million barrels per day, resulting in a decrease in net U.S. crude imports by 947,000 barrels per day.
The resurgence in refinery activity over the past month, following disruptions caused by severe winter weather and outages, has been evident. Refinery crude runs surged by 127,000 barrels per day, while refinery utilization rates increased by 1 percentage point to 87.8% of total capacity.
In contrast, distillate stockpiles, encompassing diesel and heating oil, experienced a rise of 624,000 barrels to 118.5 million barrels, contrary to expectations for an 87,000-barrel decline, according to EIA data.