Crude Stockpiles Fall Slightly, While Gasoline and Distillate Inventories Rise

U.S. Crude Oil Inventories Decline as Refinery Activity Holds Steady

U.S. crude oil inventories saw a modest drawdown last week as refineries maintained high operating rates, according to the latest weekly petroleum data. Commercial crude stocks, excluding the Strategic Petroleum Reserve, fell by 1.2 million barrels, bringing total inventories to 415.6 million barrels, approximately 5% below the five-year seasonal average.

Refinery Utilization Remains High

Refinery inputs averaged 16.9 million barrels per day (bpd) for the week ending December 27, reflecting an increase of 41,000 bpd from the previous week. Refineries operated at 92.7% of their capacity, signaling continued strong demand for crude processing. Gasoline production dipped to 9.0 million bpd, while distillate fuel production rose to 5.4 million bpd, reflecting refiners’ shift to meet seasonal heating oil and diesel demand.

Crude Oil Imports Climb

Crude oil imports rose by 455,000 bpd last week, averaging 6.9 million bpd. This marked a slight increase over the past month, yet the four-week average of 6.5 million bpd remains 1.3% lower than the same period in 2023. Despite the weekly gain, import levels suggest a tighter supply environment, reinforcing the inventory draw observed in crude oil stocks.

Product Inventories Mixed

Gasoline inventories posted a substantial increase of 7.7 million barrels, although total gasoline stocks remain marginally below the five-year average. Distillate inventories also rose significantly by 6.4 million barrels but are still 6% under typical seasonal levels. Propane/propylene inventories declined by 0.6 million barrels but remain 10% above the five-year average, providing ample supply for heating demands. Overall, total commercial petroleum inventories expanded by 9.3 million barrels, offsetting the crude oil drawdown.

Demand Trends Offer Mixed Signals

Total product demand over the past four weeks averaged 20.3 million bpd, representing a slight 1.2% decline year-over-year. However, gasoline demand ticked up by 0.6% to 8.7 million bpd, while distillate fuel consumption surged by 8.4% to 3.9 million bpd. Jet fuel demand also strengthened, rising 6.1% compared to the previous year, signaling robust travel activity through the holiday period.

Market Forecast

The draw in crude inventories coupled with rising imports points to a market balancing supply with consistent refining demand. However, the sharp rise in gasoline and distillate inventories could weigh on prices in the short term. Expect near-term bearish pressure on crude prices, particularly if refinery activity holds above 90% capacity and product inventories continue to build.