Recent government data revealed that commercial crude stockpiles in the United States rose more than anticipated last week, driven by an increase in gasoline production. Inventories of crude oil, not including the strategic petroleum reserve, rose by 2.1 million barrels, reaching a total of 429.7 million barrels for the week ending Friday.
The expected rise was only 1.6 million barrels, indicating a significant surge. Despite this increase, current inventories stand 4% below the five-year average for this time of year. Gasoline production saw a notable spike, averaging 10.3 million barrels per day, compared to 9.7 million barrels per day in the previous week.
However, distillate fuel output experienced a slight decline, dropping from 5.1 million barrels per day to 5 million. Additionally, commercial motor gasoline inventories decreased by 4.4 million barrels. Propane and propylene stocks fell by 2.1 million barrels, while distillate fuel inventories decreased by 1.4 million barrels.
Overall, total commercial petroleum inventories experienced a drop of 6.5 million barrels last week according to the data from the Energy Information Administration (EIA). On the refinery side, crude inputs averaged 16.5 million barrels per day, marking an increase of 175,000 barrels from the previous week's average.
Refineries operated at a capacity of 91.4%, compared to 90.5% the week before. In related market activity, West Texas Intermediate crude oil saw a slight increase of 0.2%, reaching $68.56 a barrel, while Brent crude also rose by 0.2%, reaching $72.39. The International Energy Agency (IEA) announced an upward revision to its global oil demand forecast for 2024, as oil consumption in advanced economies showed a rebound in the third quarter.
The IEA's 2025 demand target remained largely unchanged. However, TPH Energy analyst Matt Portillo noted potential challenges, stating, "The global economy and the rollout of alternative fuel vehicles remain headwinds for demand with the potential for tariffs further muddying the water." Earlier in the week, the Organization of the Petroleum Exporting Countries (OPEC) reduced its global oil demand projections for both 2024 and 2025 for the fourth consecutive month..