U.S. gasoline inventories have fallen to their lowest levels in two years, experiencing an unexpected drawdown last week driven by strong demand, according to the Energy Information Administration (EIA). Meanwhile, crude oil stockpiles increased more than anticipated.
Inventory Changes:
Gasoline stocks decreased by 4.4 million barrels for the week ending November 8, bringing total inventories down to 206.9 million barrels, the lowest since November 2022. This contrasts with analysts’ expectations for a 600,000-barrel increase.
East Coast gasoline inventories reached their lowest levels since April 2023, while the Midwest saw its inventories drop to their lowest since last November.
Distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels to 114.4 million barrels, against expectations for a 200,000-barrel rise.
Demand Insights:
Total products supplied, a proxy for demand, surged to 21.6 million barrels per day (bpd), up from 19.7 million bpd. The four-week average demand is approximately 1.7% higher than last year.
Gasoline demand increased by 6% to 9.4 million bpd, while distillate demand rose by 17% to 4.1 million bpd.
Market Reactions:
Analysts, including Phil Flynn from Price Futures Group, noted that “product supplies are very tight,” and the significant draw in gasoline is raising concerns in the market.
Following the surprise draw, U.S. gasoline futures spiked, with heating oil futures also climbing. Brent and U.S. crude futures saw slight increases as well.
Crude Inventory Developments:
Crude inventories rose by 2.1 million barrels to 429.7 million barrels, exceeding analysts’ expectations for a 750,000-barrel increase.
Stocks at the Cushing, Oklahoma, delivery hub decreased by 688,000 barrels.
Net U.S. crude imports fell by 321,000 bpd to 3.1 million barrels, while exports rose by 590,000 bpd to 3.4 million bpd.
Refinery crude runs increased by 175,000 bpd, with refinery utilization rates climbing by 0.9 percentage points to 91.4% of total capacity.