Commercial crude stockpiles in the US experienced a notable decline last week, with significant reductions in propane and propylene inventories, as reported by government data on Wednesday. Inventories of crude oil, excluding the strategic petroleum reserve, fell by 1.8 million barrels, reaching a total of 428.4 million barrels for the week ending Friday.
Market expectations had anticipated a decrease of only 1 million barrels based on a Bloomberg poll. Notably, these numbers indicate a level 5% below the five-year average for this time of year. In addition to crude oil, propane and propylene inventories saw a decrease of 1 million barrels last week, while overall motor gasoline inventories increased by 3.3 million barrels.
Distillate fuel inventories also rose by 400,000 barrels. Overall commercial petroleum inventories were reported to be down by 1.8 million barrels during the same period, according to the latest data from the Energy Information Administration (EIA). Crude refinery inputs averaged 16.3 million barrels per day last week, which represents an increase of 67,000 barrels compared to the previous week's average.
As a result, refineries operated at 90.5% of their capacity, up from the preceding week's 90.2%. In terms of gasoline production, there was an increase to 9.7 million barrels per day last week, up from 9.3 million barrels in the prior week. The output of distillate fuel also showed an upward trend, rising to 5.1 million barrels per day, compared to 4.8 million barrels previously. By Wednesday afternoon, West Texas Intermediate crude oil and Brent crude prices remained relatively stable at $68.80 and $72.35 per barrel, respectively. In a statement provided by ING Bank, it was noted that "Israel and Hezbollah announced a 60-day ceasefire agreement and plans to discuss a longer-lasting peace agreement." The note emphasized that the oil market is currently evaluating the new dynamics and implications for other ongoing conflicts in the region. Furthermore, market participants are keenly awaiting the upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies this weekend, as they look for indications regarding potential delays in plans to increase production, as mentioned by ING..