Crude Oil Inventories Declined by 3.4 Million Barrels

On July 10, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories decreased by 3.4 million barrels from the previous week, compared to analyst consensus of -3.0 million. At current levels, crude inventories are about 4% below the five-year average for this time of the year.

Total motor gasoline inventories declined by 2.0 million barrels from the previous week, compared to analyst forecast of -0.5 million barrels. Distillate fuel inventories increased by 4.9 million barrels.

Crude oil imports increased by 214,000 bpd, averaging 6.8 million bpd. Crude oil imports averaged 6.7 million bpd over the past four weeks.

Strategic Petroleum Reserve increased from 372.6 million barrels to 373.1 million barrels as U.S. continued to buy oil for reserves.

Domestic oil production increased from 13.2 million bpd to 13.3 million bpd. This is an important development which shows that current prices provide sufficient incentives to boost production.

WTI oil made an attempt to settle above the $82.00 level as traders reacted to the EIA report. Interestingly, rising domestic oil production did not serve as a beraish catalyst for WTI oil in the near term. Traders focused on falling crude oil and gasoline inventories, which indicate that demand is strong. A move above the $82.00 level will push WTI oil towards the nearest resistance at $83.50 – $84.50.

Brent oil settled near the psychologically important $85.00 level after the release of the EIA data.

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