Crude Inventories Decline By 1.4 Million Barrels

On May 8, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories declined by 1.4 milion barrels from the previous week, mostly in line with the analyst consensus. At current levels, crude inventories are about 4% below the five-year average for this time of the year.

Total motor gasoline inventories grew by 0.9 million barrels, while distillate fuel inventories increased by 0.6 million barrels.

Crude oil imports increased by 198,000 bpd from the previous week, averaging 7.0 million bpd. It should be noted that crude inventories declined despite the material increase in crude oil imports.

Strategic Petroleum Reserve increased from 366.3 million barrels to 367.2 million barrels as U.S. continued to buy oil for strategic reserves.

Domestic oil production remained unchanged at 13.1 million bpd, which is not surprising as oil prices have been moving lower in recent weeks.

WTI oil rebounded from session lows as traders reacted to the EIA report. Currently, WTI oil is trying to settle above the $78.50 level. The recent pullback was driven by the material decline in geopolitical risk premium for oil. Traders do not believe that Israel – Hamas conflict will lead to any disruptions in the oil supply.

Brent oil is trying to climb above the $83.00 level as traders focus on declining crude inventories in the U.S.

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