Surplus of U.S. Product Inventory Threatens to Offset Significant Crude Oil Draw

Crude oil inventories in the United States fell this week by 7.418 million barrels for the week ending December 29, according to The American Petroleum Institute (API), after analysts predicted a draw of 2.967 million barrels. The API reported a 1.837-million-barrel build in crude inventories in the week prior.

API data shows a net build in crude oil inventories in the United States of just over 13 million barrels throughout 2023.

On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 1.1 million barrels. Inventories are now at 354.4 million barrels, with total purchases for the SPR totaling more than 7 million barrels since the Biden Administration began its buyback program.

Oil prices were trading up ahead of API data release. At 3:37 pm ET, Brent crude was trading up 3.53% at $78.57—an decrease of just over $2 per barrel compared to where it was this same time last week. The U.S. benchmark WTI was trading up on the day by 3.82%, at $73.07–a decrease of just under $2 per barrel compared to this time last week.

Gasoline inventories rose this week by 6.913 million barrels, after falling by 480,000-barrel increase in the week prior. As of last week, gasoline inventories are now 2% below the five-year average for this time of year.

Distillate inventories also rose this week, with a gain of 6.686 million barrels, after rising by 270,000 million barrels in the week prior. Distillates are roughly 9% below the five-year average.

Cushing inventories rose by 765,000 barrels, after rising by 1.57 million barrels in the previous week.

By Julianne Geiger for Oilprice.com

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