Crude Inventories Fall More Than Expected But Oil Markets Remain Under Pressure

Key Insights

• U.S. crude oil inventories decreased by 6.1 million barrels from the previous week. 
• Domestic oil production declined from 12.8 million bpd to 12.7 million bpd. 
• Strategic Petroleum Reserve grew from 348.4 million bpd to 348.9 million bpd.

On August 23, EIA released its Weekly Petroleum Status Report, which indicated that crude inventories declined by 6.1 million barrels, compared to analyst consensus of -2.85 million. At current levels, U.S. crude oil inventories are about 2% below the five-year average for this time of the year.

Total motor gasoline inventories increased by 1.5 million barrels from the previous week, while distillate fuel inventories grew by 0.9 million barrels. U.S. crude oil imports declined by 0.23 million bpd to 6.9 million bpd.

U.S. continued to buy oil for the Strategic Petroleum Reserve, although at a modest pace. SPR increased from 348.4 million barrels to 348.9 million barrels.

Domestic oil production decreased from 12.8 million bpd to 12.7 million bpd. It should be noted that domestic oil production remained close to multi-month highs.

WTI oil moved higher and made an attempt to settle above the $78.50 level after the release of the EIA report. Today, oil markets are under pressure as traders react to the disappointing Manufacturing PMI reports from various countries.

Recession worries have also put pressure on Brent oil, which settled near the $82.50 level. It remains to be seen whether the EIA report will provide enough support to oil markets today.

For a look at all of today’s economic events, check out our economic calendar.