Crude Inventories Drop By 3.7 Million Barrels

On August 7, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories decreased by 3.7 million barrels from the previous week, compared to analyst consensus of -0.4 million barrels. At current levels, crude inventories are about 6% below the five-year average for this time of the year.

Gasoline inventories increased by 1.3 million barrels, while analysts expected that they would drop by 1.8 million barrels. Distillate fuel inventories grew by 0.9 million barrels.

U.S. crude oil imports declined by 729,000 barrels, averaging 6.2 million bpd. Over the past four weeks, crude oil imports averaged 6.8 million bpd.

Strategic Petroleum Reserve increased from 375.1 million barrels to 375.8 million barrels as U.S. continued to buy oil for reserves. Oil prices have recently pulled back towards yearly lows, so U.S. will likely continue to replenish reserves.

Domestic oil production increased from 13.3 million bpd to 13.4 million bpd. This is a surprising development as oil prices have pulled back materially in recent weeks.

WTI oil tested session highs as traders reacted to the EIA report. Interestingly, traders are not worried about rising U.S. domestic oil production. From a big picture point of view, oil markets have calmed down after the recent sell-off, and traders have started to buy the dip. Currently, WTI oil is trying to settle above the $75.00 level.

Brent oil climbed above the $78.00 level amid broad rebound in the oil markets.

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