The Energy Information Administration (EIA) reported a decrease in U.S. crude and distillate inventories for the week ending December 13, driven by a significant rise in exports. Meanwhile, gasoline stockpiles saw an increase.
Key Highlights:
Crude Inventory Changes:
Crude inventories decreased by 934,000 barrels, bringing the total to 421 million barrels. This drop was smaller than analysts’ expectations of a 1.6 million-barrel decline.
Crude stocks at the Cushing, Oklahoma delivery hub rose by 108,000 barrels to 23 million barrels.
Export Surge:
U.S. crude exports surged by 1.8 million barrels per day (bpd) last week, reaching 4.89 million bpd.
Bob Yawger, director of energy futures at Mizuho, attributed the draw in crude inventories to the export increase, noting a widening spread between Brent and U.S. West Texas Intermediate (WTI) futures, which encouraged exports to higher-priced markets.
Oil Futures Reaction:
Following the report, oil futures saw gains. Global Brent futures rose by 77 cents to $73.96 a barrel, while WTI futures increased by $1.05 to $71.13 a barrel.
Refinery Activity:
Refinery crude runs fell by 48,000 bpd, with utilization rates dropping by 0.6 percentage points to 91.8%. The four-week average for utilization was 92%, up from 90.7% a year ago.
Phil Flynn, a senior analyst for Price Futures Group, remarked that refiners are operating at high levels, reflecting strong demand.
Product Supply and Stock Changes:
Total product supplied, a proxy for demand, increased to 20.8 million bpd, up 662,000 bpd from the previous week.
U.S. gasoline stocks rose by 2.3 million barrels to 222 million barrels, exceeding analysts’ expectations for a 2.1 million-barrel increase.
Distillate stockpiles, which include diesel and heating oil, fell by 3.2 million barrels to 118.2 million barrels, contrasting with expectations for a 0.7 million-barrel rise. Distillate demand reached its highest level since March 2022.
Import Trends:
Net U.S. crude imports fell by 1.13 million bpd, further impacting inventory levels.