U.S. crude stockpiles fell sharply last week, dropping 3.3 million barrels amid surging refinery activity, while weaker-than-expected fuel demand tempered bullish momentum in oil markets, according to the Energy Information Administration (EIA).
Key Data Points (Week Ending March 21):
Crude Inventories: Fell to 433.6M barrels, far exceeding the 956,000-barrel draw analysts forecast.
Refinery Activity: Utilization rates rose to 87% (up 0.1% weekly), marking a third straight weekly increase as plants exit maintenance.
Fuel Demand Concerns:
Gasoline Stocks: Declined 1.4M barrels (vs. 1.8M expected), with demand slipping to 8.6M bpd (from 8.8M).
Distillate Stocks: Fell 420,000 barrels (vs. 1.6M forecast).
Jet Fuel Demand: Dropped to 1.4M bpd, a February 2024 low.
Market Drivers:
Refining Rebound: Increased runs (+87,000 bpd) absorbed crude stocks, but weaker fuel consumption ahead of summer driving season raised concerns.
Cushing Hub Draw: Stocks at the key delivery point fell 755,000 barrels, easing storage pressures.
Net Imports Surge: U.S. crude imports jumped 845,000 bpd, reflecting strong refining demand.
Expert Insights:
Josh Young, Bison Interests: “Refiners are ramping up, but demand needs to catch up to justify sustained price gains.”
Bob Yawger, Mizuho: “Gasoline demand is unimpressive with Memorial Day just two months away—markets need a summer fuel surge.”