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
Proxy Vote Preview: Chevron, Hess and Guyana Uncertainty
2024-05-27 - Chevron Corp. stockholders will vote on May 28 and Hess’ stakeholders on May 29 on a $53 million combination that largely centers on Hess’ stake offshore Guyana.
Martin Resource Offers to Buy Spinoff Martin Midstream for $100.3MM
2024-05-27 - Martin Resource Management created Martin Midstream through an IPO in 2002.
Solaris to Acquire Mobile Energy Rentals, Rename to Solaris Energy Infrastructure
2024-07-10 - Following the closing of its deal to acquire Mobile Energy Rentals, Solaris Oilfield Infrastructure will also be rebranding to Solaris Energy Infrastructure to more closely represent its expanded solutions offerings.
APA Closes Midland Basin, Eagle Ford Divestitures for $660 Million
2024-07-11 - APA Corp. and subsidiary Apache sold non-core assets in the Permian Basin and Eagle Ford Shale sooner than expected, and for less, as the company looks to reduce debt from its Callon Petroleum deal earlier this year.
Martin Resource Sidesteps Firms’ Criticism, Offer for Midstream MLP
2024-07-11 - Martin Resource Management, which in May proposed buying spinoff Martin Midstream Partners, responded to two capital firms’ counteroffer made public July 11 by saying it’s not interested.