USA Commercial Crude Oil Inventories Drop

U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased by 1.8 million barrels from the week ending November 15 to the week ending November 22, according to the U.S. Energy Information Administration’s (EIA) latest weekly petroleum status report.

Crude oil stocks, excluding the SPR, stood at 428.4 million barrels on November 22, 430.3 million barrels on November 15, and 449.7 million barrels on November 24, 2023, the EIA showed in its report, which was released on Wednesday and included data for the week ending November 22. The EIA report highlighted that data may not add up to totals due to independent rounding.

Total petroleum stocks – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.632 billion barrels on November 22, the report highlighted. This figure was down 0.6 million barrels week on week and up 9.8 million barrels year on year, the report showed.

“At 428.4 million barrels, U.S. crude oil inventories are about five percent below the five year average for this time of year,” the EIA said in its latest weekly petroleum status report.

“Total motor gasoline inventories increased by 3.3 million barrels from last week and are about three percent below the five year average for this time of year,” it added.

“Both finished gasoline and blending components inventories increased last week. Distillate fuel inventories increased by 0.4 million barrels last week and are about five percent below the five year average for this time of year,” it continued.

“Propane/propylene inventories decreased by 1.0 million barrels from last week and are nine percent above the five year average for this time of year,” it went on to state.

U.S. crude oil refinery inputs averaged 16.3 million barrels per day during the week ending November 22, according to the report, which highlighted that this was 67,000 barrels per day more than the previous week’s average.

“Refineries operated at 90.5 percent of their operable capacity last week. Gasoline production increased last week, averaging 9.7 million barrels per day. Distillate fuel production increased last week, averaging 5.1 million barrels per day,” the report noted.

The EIA report stated that U.S. crude oil imports averaged 6.1 million barrels per day last week and pointed out that this was a decrease of 1.6 million barrels per day from the previous week.

“Over the past four weeks, crude oil imports averaged about 6.6 million barrels per day, 5.5 percent more than the same four-week period last year,” the EIA said.

“Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 636,000 barrels per day, and distillate fuel imports averaged 144,000 barrels per day,” it added.

The EIA noted in the report that total products supplied over the last four-week period averaged 20.4 million barrels a day. It said this was up by 1.0 percent from the same period last year.

“Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, up slightly from the same period last year,” the EIA added.

“Distillate fuel product supplied averaged 3.7 million barrels a day over the past four weeks, down by 3.4 percent from the same period last year. Jet fuel product supplied was up 3.3 percent compared with the same four-week period last year,” it continued.

In a report sent to Rigzone on Monday by the Macquarie team, Macquarie strategists forecast that U.S. crude inventories would be down by around 5.8 million barrels for the week ending November 22.

In a report sent to Rigzone last Thursday by the Macquarie team, Macquarie strategists outlined that they saw “potential for a U.S. crude stock draw” in the EIA’s November 27 weekly petroleum status report.

“Looking ahead to next week’s release, we see potential for a U.S. crude stock draw (-3.3 million barrels), with runs up (+0.4 million barrels per day), nominal implied supply sharply higher (+1.0 million barrels per day), net imports sharply lower (-1.2 million barrels per day), and a similar increase in SPR inventory (+1.4 million barrels) on the week,” the strategists stated in that report.

“We note potential for volatility in these figures given the incomplete nature of this week’s data. Among products, our preliminary expectations point to a draw in gasoline (-2.8 million barrels), with distillate down slightly (-0.3 million barrels), and a build in jet (+0.6 million barrels),” they added.

In a report sent to Rigzone on Thursday, Ole R. Hvalbye, a Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), outlined that the EIA inventory data “highlights the tight supply conditions in the market”.

“Commercial crude inventories (excluding SPR) declined by 1.8 million barrels week on week, bringing total stocks to 428.4 million barrels,” he pointed out.

“While smaller than the 5.9 million barrel draw estimated by the API [American Petroleum Institute], inventories remain approximately five percent below the five-year average for this time of year,” he added.

Hvalbye noted in the report that refined product inventories presented a mixed picture.

“Gasoline inventories increased by 3.3 million barrels (compared to API's estimate of 1.8 million barrels), yet they remain three percent below the five-year average. Similarly, distillate inventories (diesel) rose by 0.4 million barrels but are still five percent below the five-year norm, contrasting with API's estimate of a 2.5 million barrel build,” he added.

“The modest crude draw continues to signal tight market conditions, particularly when combined with overall low inventory levels across petroleum products,” he continued.

Hvalbye stated in the report that refinery operations also provided important insights.

“U.S. refinery inputs averaged 16.3 million barrels per day, with facilities operating at 90.5 percent capacity. Crude imports declined sharply, averaging 6.1 million barrels per day, down 1.6 million barrels compared to the previous week,” he highlighted.

“Over the past four weeks, total product supply - a key indicator of demand - averaged 20.4 million barrels per day, representing a one percent year on year increase. Gasoline demand remained steady, while distillate fuel demand declined by 3.4 percent, and jet fuel demand rose by 3.3 percent,” he added.

Hvalbye stated in the report that, “despite this week’s bearish price action, the decline in U.S. crude inventories, albeit smaller than expected, signals that market fundamentals remain somewhat tight and [are] capping the downside to prices”.

“Additionally, the drop in total commercial petroleum inventories - down by 1.8 million barrels last week - further underscores this. U.S. inventories, alongside ongoing geopolitical developments and OPEC+ decisions, will continue to dominate the crude oil narrative in the coming weeks,” Hvalbye added.

The EIA’s next weekly petroleum status report is scheduled to be released on December 4 and will include data for the week ending November 29.

To contact the author, email andreas.exarheas@rigzone.com