Commercial crude stockpiles in the US experienced a larger-than-expected decline last week, as reported by government data. Oil prices were trading lower in anticipation of a crucial policy meeting among leading oil-producing nations. Inventories of crude oil, excluding the strategic petroleum reserve, decreased by 5.1 million barrels, bringing the total down to 423.4 million barrels for the week ending Friday, as indicated by the Energy Information Administration.
Market consensus was forecasting a decline of only 1.8 million barrels. This recent drop highlights that inventories are now 5% below the five-year average for this time of year. Other inventories also shifted during the week, with propane and propylene stocks falling by 700,000 barrels. In contrast, total motor gasoline stocks saw an increase of 2.4 million barrels, and distillate fuel inventories grew by 3.4 million barrels.
Overall, total commercial petroleum inventories dropped by 4.7 million barrels last week, according to the EIA's data. Production levels for gasoline decreased to 9.5 million barrels per day last week, compared to 9.7 million barrels the previous week. In contrast, the output of distillate fuel rose to 5.3 million barrels per day, up from 5.1 million barrels. Crude refinery inputs averaged 16.9 million barrels per day last week, reflecting an increase of 615,000 barrels from the prior week's average.
Refineries operated at 93.3% of their capacity, up from 90.5% the week before. In market activity, West Texas Intermediate crude oil prices fell 1.8%, settling at $68.66 in afternoon trading, while Brent crude slipped 1.7% to $72.37. The Organization of the Petroleum Exporting Countries and its allies are anticipated to possibly postpone a planned production increase during their upcoming meeting on Thursday, citing sluggish demand and concerns about oversupply, as noted by Saxo Bank in a Wednesday report.
This meeting had previously been delayed from December 1. On a separate note, the US government announced sanctions on 35 entities and vessels linked to Iranian oil shipments. This move was a response to Iran's attack on Israel on October 1 and concerns regarding Iran's nuclear activities, as stated by the US Department of Treasury at that time..