In the latest government data release, it was noted that commercial crude stockpiles in the United States experienced a smaller-than-expected drop last week, amid increases in motor gasoline and distillate fuel inventories. The Energy Information Administration reported a decrease in crude inventories, which, excluding the strategic petroleum reserve, fell by 1.2 million barrels to stand at 415.6 million barrels for the week ending Friday.
Analysts had anticipated a more significant drawdown of 2.5 million barrels, as indicated by a Bloomberg poll. Currently, these inventories are roughly 5% below the five-year average for this period. On the other hand, total motor gasoline inventories showcased a notable increase, rising by 7.7 million barrels, while distillate fuel stocks expanded by 6.4 million barrels.
However, inventories of propane and propylene saw a reduction, declining by 600,000 barrels. Overall commercial petroleum inventories registered a gain of 9.3 million barrels, as per the latest EIA data. Production levels reflected mixed trends, with gasoline output dropping to 9 million barrels per day last week, down from 9.9 million barrels the previous week.
In contrast, distillate fuel production saw a slight increase, moving up to 5.4 million barrels per day from the prior week’s 5.3 million barrels. The crude refinery inputs averaged 16.9 million barrels per day last week, showing a slight increase of 41,000 barrels compared to the previous week’s average.
Refineries are functioning at 92.7% of their capacity, which is an improvement from 92.5% recorded in the week before. In the commodities market, West Texas Intermediate crude oil prices saw a 2% rise, hitting $73.16 a barrel in late-afternoon trading on Thursday, while Brent Crude also experienced an uptick of 1.7%, reaching $75.93 per barrel. Looking ahead, a survey conducted by the Federal Reserve Bank of Dallas indicated that the WTI price is projected to average $71 per barrel by the end of 2025.
Furthermore, crude futures are expected to surge to $74 and $80 per barrel in the upcoming two and five years respectively, as pointed out in the survey results..