Crude Inventories Decline By 17 Million Barrels

Key Insights

• Crude inventories declined by 17 million barrels, but oil markets moved lower.
• Crude oil imports increased by 0.3 million bpd.  
• Domestic oil production remained unchanged at 12.2 million bpd. 

On August 2, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories decreased by 17 million barrels from the previous week, compared to analyst consensus of -1.4 million barrels.

Total motor gasoline inventories increased by 1.5 million barrels from the previous week, while distillate fuel inventories declined by 0.8 million barrels.

Crude oil imports averaged 6.7 million bpd, rising by 0.3 million bpd from the previous week.

Domestic oil production remained unchanged at 12.2 million bpd. In recent months, domestic oil production has mostly ranged between 12.2 million bpd and 12.4 million bpd.

Strategic Petroleum Reserve remained unchanged at multi-decade lows at 346.8 million barrels. The sales of oil from SPR have been stopped, and traders expect that U.S. will start buying oil for SPR some time this year. However, it remains to be seen whether U.S. will start to replenish SPR when WTI oil is trading near the $80 level.

WTI oil moved below the $80 level after the release of the EIA report. While crude inventories declined by 17 million barrels, traders decided to take some profits off the table after the recent rally.

Brent oil has also found itself under significant pressure and moved towards the $83.50 level. U.S. debt downgrade served as an additional negative catalyst for Brent oil.

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