US crude stocks rose 1.9m barrels vs a 1.0m draw expected, driven by higher imports and weaker exports. However, gasoline (-4.6m) and distillate (-3.4m) draws signal firm demand, keeping the broader oil market backdrop supportive.
From data published Wednesday morning US time.
Earlier:
Summary:
- Crude inventories rose +1.9m vs -1.0m expected
- Build driven by higher imports and weaker exports
- Gasoline (-4.6m) and distillates (-3.4m) show strong demand/tightness
- SPR fell -4.1m amid ongoing Middle East-related releases
- Production steady at 13.6mbpd; refinery runs slightly softer than expected
US crude oil inventories unexpectedly increased last week, but the details of the report point to a more nuanced and supportive backdrop for oil markets, with refined fuel stocks tightening and demand holding steady.
Data from the U.S. Energy Information Administration showed commercial crude inventories rose by 1.9 million barrels to 465.7 million barrels in the week to April 17. This contrasted with expectations for a 1 million barrel draw, making the headline figure appear bearish at first glance. However, the build was largely driven by flow dynamics rather than a deterioration in underlying demand.
Crude imports increased sharply by 787,000 barrels per day to 6.1 million bpd, while exports declined by 427,000 bpd to 4.8 million bpd. This shift in trade flows effectively added barrels into the domestic system, explaining much of the inventory build.
At the same time, the US continued to draw on its Strategic Petroleum Reserve, which fell by 4.1 million barrels to 405 million barrels as authorities respond to ongoing supply disruptions tied to the Middle East conflict. This ongoing release underscores the extent of global supply strain and the policy response aimed at stabilising markets.
More constructive signals emerged from refined products. Gasoline inventories fell by 4.6 million barrels, well beyond expectations for a 1.4 million barrel draw, bringing stocks slightly below seasonal norms. Distillate inventories also declined by 3.4 million barrels, more than double the expected draw, leaving stocks significantly below their five-year average. These declines suggest firm end-user demand and tightening supply in key fuel markets.
Operational data was mixed. Refinery utilisation edged lower to 89.1% of capacity, versus expectations for a modest increase, while crude throughput dipped slightly. Meanwhile, US crude production held steady at 13.6 million barrels per day, indicating stable supply at elevated levels.
Taken together, while the crude build may weigh on sentiment at the headline level, the broader report points to a market where demand remains resilient and product markets are tightening. In the current geopolitical environment, with ongoing disruptions to global supply chains, these underlying dynamics are likely to remain supportive for prices.
