U.S. crude oil stockpiles fell more than expected to their lowest levels since October 2018, but gasoline inventories surged due to weak demand, the Energy Information Administration (EIA) said on Jan. 12.
Crude inventories fell by 4.6 million barrels in the week to Jan. 7 to 413.3 million barrels, compared with analysts’ expectations in a Reuters poll for a 1.9 million-barrel drop.
U.S. crude inventories have dropped for seven consecutive weeks, and overall inventories have been tightening across the globe as major producers struggle to increase supply even as demand rises.
Major holders of crude barrels in the U.S. Gulf Coast have been reducing inventories. Overall, stocks at the Gulf, where roughly half of U.S. refining capacity is located, fell to their lowest levels since January 2020.
U.S. gasoline stocks rose by 8 million barrels in the week to 240.8 million barrels, compared with expectations for a 2.4 million-barrel rise.
Gasoline product supplied fell last week to 7.9 million bbl/d, its lowest level since February 2021. The four-week moving average dropped to 8.7 million bbl/d.
“In a matter of weeks, we’ve fallen to really paltry demand—we’re approaching pandemic type demand levels and I don’t know if it is Omicron-related or not but people are hunkering down in a big way,” said John Kilduff, partner at Again Capital in New York.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell by 2.5 million barrels last week, the EIA said.
“The freeze in the Dakotas shut the Keystone pipe for one day—that’s where the Cushing number is coming from,” said Robert Yawger, director of energy futures at Mizuho.
Oil prices added to gains on the news. Brent crude futures settled up 95 cents, or 1.1%, at $84.67/bbl. WTI crude futures in the U.S. were up $1.42, or 1.8%, at $82.64.
The crude drawdowns came even as refiners cut activity, with runs down by 294,000 bbl/d and utilization rates falling 1.4 percentage points in the week.
Distillate stockpiles, which include diesel and heating oil, rose by 2.5 million barrels.
Net U.S. crude imports rose last week by 784,000 bbl/d, the EIA said.
Recommended Reading
NAPE: Turning Orphan Wells From a Hot Mess Into a Hot Opportunity
2024-02-09 - Certain orphaned wells across the U.S. could be plugged to earn carbon credits.
Exxon Versus Chevron: The Fight for Hess’ 30% Guyana Interest
2024-03-04 - Chevron's plan to buy Hess Corp. and assume a 30% foothold in Guyana has been complicated by Exxon Mobil and CNOOC's claims that they have the right of first refusal for the interest.
Petrobras to Step Up Exploration with $7.5B in Capex, CEO Says
2024-03-26 - Petrobras CEO Jean Paul Prates said the company is considering exploration opportunities from the Equatorial margin of South America to West Africa.
The OGInterview: How do Woodside's Growth Projects Fit into its Portfolio?
2024-04-01 - Woodside Energy CEO Meg O'Neill discusses the company's current growth projects across the globe and the impact they will have on the company's future with Hart Energy's Pietro Pitts.
Deepwater Roundup 2024: Offshore Australasia, Surrounding Areas
2024-04-09 - Projects in Australia and Asia are progressing in part two of Hart Energy's 2024 Deepwater Roundup. Deepwater projects in Vietnam and Australia look to yield high reserves, while a project offshore Malaysia looks to will be developed by an solar panel powered FPSO.