Crude Inventories Rise By 1.8 Million Barrels, Exceeding Analyst Expectations

On May 22, 2024, EIA released its Weekly Petroleum Status report. The report indicated that crude inventories increased by 1.8 million barrels from the previous week, compared to analyst consensus of -2.5 million barrels. At current levels, crude inventories are about 3% below the five-year average for this time of the year.

Total motor gasoline inventories declined by 0.9 million barrels, compared to analyst forecast of -1.2 million barrels. Distillate fuel inventories increased by 0.4 million barrels.

U.S. crude oil imports declined by 81,000 bpd, averaging 6.7 million bpd. Over the past four weeks, crude oil imports averaged 6.8 million bpd.

Strategic Petroleum Reserve increased from 367.8 million barrels to 368.8 million barrels as U.S. continued to buy oil for strategic reserves.

Domestic oil production remained unchanged at 13.1 million bpd. Current oil price levels are not attractive enough to boost production.

WTI oil settled near the $78.00 level as traders reacted to the EIA report. The report was rather bearish, but it looks that rising crude inventories have been already priced in by the market. From a big picture point of view, WTI oil remains range-bound since early May.

Brent oil  is trading near the $82.00 level after an unsuccessful attempt to settle below $81.50. It looks that traders have already started to prepare for the driving season, which should provide additional support to oil markets.

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