Crude Inventories Decreased By 6.3 Million Barrels

Vladimir Zernov
Published: Sep 7, 2023, 15:18 GMT+00:00

The EIA report showed that U.S. was buying oil for the Strategic Petroleum Reserve despite rising oil prices.


In this article:

Key Insights

  • Crude inventories declined by 6.3 million barrels, exceeding analyst expectations.
  • Strategic Petroleum Reserve grew from 349.5 million barrels to 350.3 million barrels. 
  • Domestic oil production remained unchanged at 12.8 million bpd. 

On September 7, EIA released its Weekly Petroleum Status report. The report indicated that crude inventories declined by 6.3 million barrels, compared to analyst consensus of -2.06 million barrels. At current levels, U.S. crude oil inventories are about 4% below the five-year average for this time of the year.

Total motor gasoline inventories decreased by 2.7 million barrels, while distillate fuel inventories grew by 0.7 million barrels.

Strategic Petroleum Reserve increased from 349.5 million barrels to 350.3 million barrels, so U.S. continued to buy oil for strategic reserves despite rising oil prices. U.S. purchases of oil for reserves serve as an additional positive catalyst for oil markets.

Domestic oil production remained unchanged at 12.8 million bpd. At this point, rising oil prices did not provide sufficient incentives to push production above the 13.0 million bpd level.

Interestingly, oil markets did not show a strong reaction to the EIA report. WTI oil continued to trade near the $87.50 level, while Brent oil remained close to the $90.50 level.

It looks that traders decided to take some profits off the table after the strong rally, so the bullish report did not provide immediate support to oil prices. In addition, worries about the health of the global economy and a potential rate hike from the Fed serve as additional negative catalysts for oil markets.

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About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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