Crude Inventories Rise By 3.7 Million Barrels, Exceeding Analyst Expectations

On June 12, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories increased by 3.7 million barrels from the previous week, compared to analyst consensus of -1.55 million barrels. At current levels, crude inventories are about 4% below the five-year average for this time of the year.

Gasoline inventories grew by 2.6 million barrels, while analysts expected that they would grow by 1.25 million barrels. Distillate fuel inventories increased by 0.9 million barrels from the previous week.

Crude oil imports averaged 8.3 million bpd, rising by 1.2 million bpd from the prevous week. Rising crude oil imports were the key driver for the surprising increase in crude inventories.

Strategic Petroleum Reserve increased from 370.2 million barrels to 370.5 million barrels as U.S. continued to buy oil for reserves.

Importantly, domestic oil production increased from 13.1 million bpd to 13.2 million bpd. This is a bearish development for oil markets.

WTI oil pulled back from session highs as traders reacted to the EIA report. Currently, WTI oil is trying to settle below the $78.50 level. Rising crude inventories and the increase in domestic oil production served as the key drivers for the move.

Brent oil has also found itself under pressure after the release of the report. Currently, Brent oil is trying to settle below the $82.50 level as traders rush to take profits off the table after the rebound from June lows.

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