Crude Inventories Increased By 1.4 Million Barrels, Exceeding Analyst Expectations

Key Insights

• Crude inventories grew by 1.4 million barrels from the previous week. 
• Domestic oil production remained unchanged at 13.2 million bpd. 
• Strategic Petroleum Reserve has also remained unchanged at 351.3 million barrels. 

On October 25, EIA released Weekly Petroleum Status Report, which indicated that crude inventories increased by 1.4 million barrels from the previous week, compared to analyst consensus of +0.24 million.

Total motor gasoline inventories grew by 0.2 million barrels, while distillate fuel inventories declined by 1.7 million barrels. U.S. crude oil imports averaged 6.0 million bpd, rising by 71,000 bpd from the previous week.

Domestic oil production remained unchanged at 13.2 million bpd. Domestic oil production has stabilized near multi-month highs, which shows that current prices provide sufficient incentives to oil producers.

Strategic Petroleum Reseve remained unchanged at 351.3 million barrels. U.S. is not ready to buy oil at current price levels and is waiting for an additional pullback.

Oil markets remain under pressure as traders react to the EIA report. WTI oil made an attempt to settle below the $83.00 level, while Brent oil traded below $87.00.

Oil traders also remain focused on Israel-Hamas conflict, which has served as a leading catalyst for oil markets in recent weeks. The ground operation against Hamas has not started, and the recent trading action indicates that oil traders believe that the conflict will not spread to other countries.

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