Commercial crude stockpiles in the US fell less than projected last week as motor gasoline inventories grew, government data showed Wednesday. Inventories of crude, excluding the strategic petroleum reserve, dipped by 900,000 barrels to 421 million barrels through the week ended Friday, the Energy Information Administration said.
The consensus was for a decrease of 1.7 million barrels, with inventories sitting 6% below the five-year average for this time of year. Distillate fuel stocks fell by 3.2 million barrels last week while propane and propylene inventories dropped by 3 million barrels. Total motor gasoline stocks climbed by 2.3 million barrels, reflecting changing consumption patterns.
Total commercial petroleum inventories were down 3.2 million barrels last week, the EIA's data showed. Gasoline production decreased to 9.9 million barrels per day last week from 10 million barrels per day the week prior, indicating a slight reduction in supply. Distillate fuel output edged down to 5.1 million barrels per day from 5.2 million barrels, marking another contraction. Crude refinery inputs averaged 16.6 million barrels per day last week, which was 48,000 barrels less than the prior average, showcasing the ebb in refining activity.
Refineries operated at 91.8% of their capacity, down from 92.4% the week prior. In market reactions, West Texas Intermediate crude oil dipped 0.6% to $69.67 per barrel in afternoon trade while Brent edged down 0.2% at $73.03. Market observers note that the continued threats of additional sanctions on Iran and Russian oil supplies, along with persistent tensions in the Middle East and Europe, continued to provide a floor for oil prices, as stated by ING Bank in a Wednesday note. Furthermore, risks of an Israeli strike on Iran's nuclear facilities heightened in the aftermath of a sudden collapse of the Bashar Al-Assad regime in Syria, RBC Capital Markets reported in a recent note. In the political landscape, Germany will reportedly hold snap elections following Chancellor Olaf Scholz losing a vote of confidence on Monday, which could further influence the market dynamics in Europe..