Distillate Stocks Sink Further as U.S. Crude Inventories Barely Budge

U.S. crude oil inventories remained relatively unchanged in the week ending August 14, according to the American Petroleum Institute (API), with a mere 328,000 barrels being reduced. This is in stark contrast to the previous week, when inventories surged by 9.072 million barrels due to increased imports, reduced exports, and a significant contribution from the Strategic Petroleum Reserve (SPR).

Over the past eighteen weeks, commercial crude oil inventories, excluding the SPR, have dwindled by over 49 million barrels, while the SPR's total capacity stands at 293.4 million barrels, just 438 million barrels away from reaching full capacity. For the week of August 14, an additional 5.3 million barrels were drawn from the SPR to bolster commercial inventories, thus elevating the SPR's inventory to its current level.

US crude production in the week ending August 7 hit 13.805 million barrels per day (bpd), up from 13.804 bpd the previous week and an impressive 521,000 bpd compared to the preceding year. As of 3:19 PM ET on Tuesday, Brent crude was trading at $91.10 (0.25%), marking a $2 per barrel increase from the previous week. WTI crude also saw a $0.45 (0.53%) per barrel rise, now at $85.90, up about $1.70 per barrel from last week's trading.

Meanwhile, gasoline inventory expanded by 1.076 million barrels in the week ending August 14, following a 1.531 million barrel decrease in the prior week. Notably, gasoline inventories were already 6% below the five-year average for this period, as per the latest Energy Information Administration (EIA) data. Distillate inventories, on the other hand, contracted by 2.797 million barrels, compounded by a 596,000-barrel loss in the week prior.

Distillate inventories were also found to be 12% below the five-year average heading into this reporting period, as indicated by the most recent EIA data. Lastly, Cushing inventory—the reserve stored at the delivery hub for the WTI Crude futures contract—declined by 1.439 million barrels over the reporting period, after a rise of 1.571 million barrels in the preceding week.