Crude Inventories Fell 2.5 Million Barrels Despite Surging Imports

Key Insights

• Domestic oil production increased from 13.2 million bpd to 13.3 million bpd. 
• Strategic Petroleum Reserve grew from 355 million to 355.6 million barrels. 
• Working gas in storage declined by 154 Bcf from the previous week. 

On January 18, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories decreased by 2.5 million barrels from the previous week, compared to analyst consensus of -0.3 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 increased by 3.1 million barrels, while analysts expected that they would grow by 2.15 million barrels. Crude oil imports increased by 1.2 million bpd, averaging 7.4 million barrels.

Domestic oil production increased from 13.2 million bpd to 13.3 million bpd. While OPEC+ is cutting production, U.S. companies are gaining market share.

U.S. continued to buy oil for reserves, and the Strategic Petroleum Reserve increased from 355 million barrels to 355.6 million barrels.

WTI oil settled above the $73.00 level as traders reacted to EIA data. Crude inventories decreased despite the significant increase in crude oil imports, which is a bullish sign. Brent oil made an attempt to settle above the 78.50 level.

Traders should note that the increase in domestic oil production may serve as a bearish catalyst for oil markets. However, domestic oil production must climb towards the 13.5 million bpd level to have a significant impact on oil price dynamics.

Today, EIA has also released its Weekly Natural Gas Storage Report. The report indicated that working gas in storage declined by 154 Bcf from the previous week, compared to analyst consensus of -140 Bcf.

Natural gas  remained under pressure after the release of EIA data. Currently, natural gas is trying to settle below the $2.75 level as traders focus on warm weather forecasts.

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