Crude Inventories Decline By 2.2 Million Barrels, Missing Analyst Expectations

On October 17, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories declined by 2.2 million barrels from the previous week, compared to analyst consensus of +2.3 million barrels. At current levels, crude inventories are about 5% below the five-year average for this time of the year.

Total motor gasoline inventories declined by 2.2 million barrels, compared to analyst forecast of -1.4 million barrels. Distillate fuel inventories declined by 3.5 million barrels from the previous week.

Crude oil imports declined by 710,000 bpd, averaging 5.5 million bpd. Over the past four weeks, crude oil imports averaged 6.2 million bpd. The decline in crude oil imports served as the key catalyst for the decline in crude inventories.

Strategic Petroleum Reserve increased from 382.9 million barrels to 383.9 million barrels as U.S. continued to buy oil for reserves.

Domestic oil production increased from 13.4 million bpd to 13.5 million bpd. Rising domestic oil production may serve as a material negative catalyst for oil markets.

WTI oil settled near the $70.80 level as traders reacted to the EIA report. While the decline in crude inventories and gasoline inventories may serve as a bullish catalyst for WTI oil, traders may also focus on rising domestic oil production.

Brent oil continued its attempts to settle above the $74.50 level. It remains to be seen whether EIA report will provide sufficient support to oil markets amid demand worries.

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