Crude Inventories Fell 1.5 Million Barrels As Imports Declined

On March 13, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories declined by 1.5 million barrels from the previous week, compared to analyst consensus of +1.34 million barrels. At current levels, crude inventories are about 3% below the five-year average for this time of the year.

Total motor gasoline inventories decreased by 5.7 million barrels, while analysts expected that they would decline by 1.9 million barrels. Distillate fuel inventories grew by 0.9 million barrels.

Crude oil imports averaged 5.5 million bpd, declining by as much as 1.7 million bpd from the previous week.

Strategic Petroleum Reserve increased from 361 million barrels to 361.6 million barrels as U.S. continued to buy oil for reserves. The purchases of oil for strategic reserves have served as an important positive catalyst for oil markets amid worries about the strength of demand from China.

Domestic oil production decreased from 13.2 million bpd to 13.1 million bpd. Declining domestic oil production may provide additional support to oil prices.

Overall, the report was bullish as crude and gasoline inventories declined, while domestic oil production pulled back despite favorable prices.

WTI oil made an attempt to settle above the $79.50 level as traders reacted to the report. From a big picture point of view, WTI oil remains range-bound below the key $80.00 level. A move above the $80.00 level will provide WTI oil with a chance to gain additional upside momentum.

Brent oil climbed above the $83.50 level as traders focused on the bullish report. Brent oil needs to settle above the resistance at $83.50 – $84.50 to gain momentum.

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