U.S. Crude Oil Stocks Fall More Than Expected — Update

By Anthony Harrup

U.S. crude oil inventories fell more than expected last week as refineries increased their capacity use, according to data released Wednesday by the U.S. Energy Information Administration.

Commercial crude oil stocks excluding the Strategic Petroleum Reserve were down by 4.6 million barrels at 426 million barrels in the week ended Aug. 16, and were about 5% below the five-year average for the time of year, the EIA said.

Analysts surveyed by The Wall Street Journal had expected crude stockpiles to fall by 1.5 million barrels.

Oil in the SPR increased by 636,000 barrels to 377.2 million barrels. Oil stored at Cushing, Okla., the Nymex delivery hub, was down by 560,000 barrels at 28.2 million barrels.

Crude futures spiked briefly on the stock draw, but gave up gains as the Labor Department revised down its estimate of jobs created in the year through March.

"What seems to be driving the market right now is the macro traders," said Phil Flynn, senior market analyst at the Price Futures Group. "We're seeing signs that job creation wasn't what it was. There's an assumption that the jobs market is solid but maybe it hasn't been, so the market's repricing a slower economy."

The EIA estimated U.S. crude oil production last week at 13.4 million barrels a day, matching the record output of two weeks earlier and up from 13.3 million the previous week. Crude imports grew by 366,000 barrels a day to 6.7 million barrels a day. The increase was partially offset by a 289,000 barrels-a-day rise in crude exports to 4 million barrels a day.

Gasoline inventories fell by 1.6 million barrels to 220.6 million barrels, or 3% below the five-year average, with demand up by 147,000 barrels a day at 9.2 million barrels a day. Gasoline stocks were expected to fall by 1.3 million barrels in the Journal survey.

"It's a good report," said Robert Yawger, executive director of energy futures at Mizuho Securities USA, noting gasoline demand was only about 800,000 barrels a day from the all-time record. "At the end of August when people aren't driving as much as they were at the beginning of summer, and you're still getting 9.2 million, that's a good demand number," he adds.

Distillate fuel stocks declined by 3.3 million barrels to 122.8 million barrels and were 10% below the average. Demand for distillates was up by 27,000 barrels a day at 3.6 million barrels a day. Refinery capacity use increased to 92.3% from 91.5% the week before, compared with expectations of a 0.3 percentage point increase.

 
Change in U.S. oil inventories for the week ended Aug. 16: 
 
                   Crude       Gasoline      Distillates       Refinery Use 
EIA data:          -4.6          -1.6           -3.3                0.8 
Forecast:          -1.5          -1.3           -0.5                0.3 
 

Note: Numbers in millions of barrels, with the exception of refinery use, which is in percentage points.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

August 21, 2024 12:13 ET (16:13 GMT)

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