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

By Anthony Harrup

U.S. crude oil inventories fell more than expected last week along with declines in gasoline and distillate stocks as refineries reduced their capacity use, according to data released Wednesday by the U.S. Energy Information Administration.

Commercial crude oil stocks excluding the Strategic Petroleum Reserve fell by 4.5 million barrels to 413 million barrels in the week ended Sept. 20, 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 predicted crude stockpiles would decrease by 800,000 barrels.

Oil stored in the SPR rose by 1.3 million barrels to 381.9 million barrels. Crude stocks at Cushing, Okla., the Nymex delivery hub, increased by 116,000 barrels to 22.8 million barrels, a first build in seven weeks.

"This is a report that's supportive and there's nothing negative that I can see on the front of it," said Phil Flynn, senior market analyst at the Price Futures Group. "The inventory numbers are going to start to matter as we get closer to winter, because inventories are tight and if we get a cold winter it's going to be a challenge."

Oil futures briefly recovered some losses following the EIA report then resumed their downward trend. "The movement in the market seems to be pessimism about the economy, whether in the U.S. or in China. We've got a pessimistic trade here," Flynn said.

Crude production was estimated at 13.2 million barrels a day for a second consecutive week, likely reflecting continued impact from the previous week's passage of Hurricane Francine which shut in some offshore production and reduced refinery operations along the Gulf coast.

Crude imports rose by 135,000 barrels a day to 6.5 million barrels a day, and exports fell by 692,000 barrels a day to 3.9 million barrels a day, the EIA said.

Refinery capacity use fell by 1.2 percentage points to 90.9%, against expectations of a 0.5 percentage point decrease. Gulf coast refinery runs were down by 2.2 percentage points.

Gasoline stockpiles were down at 1.5 million barrels to 220.1 million barrels and were 1% below the five-year average, while distillate fuel stocks dropped by 2.2 million barrels to 122.9 million barrels and were about 9% below the five-year average, the EIA said. Gasoline demand increased by 429,000 barrels a day to 9.2 million barrels a day, and distillate demand was up by 224,000 barrels a day at 4 million barrels a day.

Gasoline stocks were expected to fall by 500,000 barrels and distillate fuels by 1.2 million barrels, according to the Journal survey.

 
Change in U.S. oil inventories for the week ended Sept. 20: 
 
                   Crude       Gasoline      Distillates        Refinery Use 
EIA data:          -4.5          -1.5           -2.2               -1.2 
Forecast:          -0.8          -0.5           -1.2               -0.5 
 
 

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

September 25, 2024 12:25 ET (16:25 GMT)

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