In a recent report from the Energy Information Administration (EIA), the US has experienced a larger-than-expected draw in commercial crude oil stockpiles. Specifically, inventories of crude oil, excluding the strategic petroleum reserve, saw a decrease of 4.9 million barrels, bringing the total to 440.2 million barrels for the week ending July 12.
This drop was considerably more than the anticipated decline of just 1.1 million barrels according to consensus estimates from Bloomberg. Meanwhile, gasoline production experienced a notable decline, dropping to 9.5 million barrels per day from 10.3 million barrels in the preceding week. Conversely, the output of distillate fuels saw an increase, rising to 5.2 million barrels per day from 5.1 million barrels the week prior, as indicated by the EIA data. The data highlights that crude-oil refinery inputs averaged 16.9 million barrels per day, which is 181,000 barrels below the average from the previous week.
Furthermore, refinery operations were reported to be at 93.7% of their total capacity, showing a slight reduction from the 95.4% reported the week before. Notably, crude oil stocks are currently approximately 5% lower than the five-year average for this period. On a related note, propane and propylene inventories experienced an uptick of 4.6 million barrels, standing 16% above the five-year average for this timeframe.
Additionally, distillate fuel stocks surged by 3.5 million barrels, while total motor gasoline inventories saw an accumulation of 3.3 million barrels. As a result, total commercial petroleum inventories rose by 10.4 million barrels last week. Concerning market trends, West Texas Intermediate futures saw an increase of 2.1%, reaching $81.39 per barrel during afternoon trading.
Similarly, Brent crude prices rose by 1.6% to $85.09 per barrel, indicating a potential end to a three-day losing streak in the market. In commentary from international markets, Russia's Deputy Prime Minister, Alexander Novak, stated on Monday that the global oil market is expected to stabilize for the remainder of 2024.
This information aligns with reports indicating that several members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies are gradually ramping up production rates. Insights from the Australia and New Zealand Banking Group affirm this ongoing increase in production as noted in a Wednesday report..