In the latest report released by the Energy Information Administration (EIA), commercial crude stockpiles in the United States experienced a modest rise, falling short of analysts' expectations. The report unveiled a 1.4 million barrel increase in inventories, bringing the total to 435.2 million barrels for the week ending last Friday.
This figure was contrasted with the anticipated gain of 2 million barrels from a Bloomberg poll, indicating a tighter supply scenario than anticipated. Meanwhile, total motor gasoline inventories recorded a notable decline of 5.7 million barrels. The drop in gasoline stocks is significant, particularly at a time when fuel demand is expected to increase.
Distillate fuel stocks also fell, decreasing by 1.6 million barrels. Additionally, inventories of propane and propylene saw a sharp reduction of 3.4 million barrels. Overall, total commercial petroleum inventories experienced a decline of 6 million barrels. Refineries within the country operated at 86.5% of their capacity, which reflects a slight increase from the previous week's 85.9%.
However, the output for gasoline and distillate fuels saw a reduction, further tightening the supply chain in the oil market. In trading on Wednesday afternoon, West Texas Intermediate (WTI) crude oil prices surged by 2.3%, reaching $67.74 per barrel, while Brent crude advanced by 2%, settling at $70.97 per barrel.
This uptick in crude prices can be attributed to various factors affecting the global oil markets. The EIA had earlier noted that it anticipates Brent’s spot price to rise to $75 per barrel by the third quarter. This expectation stems from anticipated reductions in oil production from significant producers such as Iran and Venezuela, which are expected to contribute to a decrease in global oil inventories during the second quarter.
The EIA’s short-term energy outlook report emphasizes that the oil markets could remain relatively tight until mid-2025, suggesting a potential shift towards oil inventory builds later in the year. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) confirmed on Wednesday that their global oil demand and supply growth forecasts for 2025 remain consistent, presenting stability in overall market expectations.
Industry experts are closely monitoring these developments, as they could influence future pricing dynamics and strategic decisions within the oil sector..