Oil Bulls Cheer A US Inventories See Surprise Draw

The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell this week, by 4.236 million barrels in the week ending May 23 after analysts had estimated a 1-million-barrel build. The API reported a 2.499 million barrel inventory increase in the prior week.

So far this year, crude oil inventories are up more than 21 million barrels, according to Oilprice calculations of API data.

Earlier this week, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) climbed 800,000 barrels to 401.3 million barrels in the week ending May 23. Inventory levels in the SPR are hundreds of millions shy of the levels in inventory prior to the SPR withdrawal that took place under the Biden Administration, but SPR replenishment is picking up steam in recent weeks.

At 3:50 pm ET, Brent crude was trading up $0.47 (+0.73%) on the day, landing at $64.57—a $1 per barrel decline from this time last week.

WTI was also trading up on the day, by $0.61 (+1%) at $61.50—an almost $1 decline form last week’s level.

Gasoline inventories fell in the week ending May 23, by 528,000 barrels, after falling by 3.238 million barrels in the week prior. As of last week, gasoline inventories were already 2% below the five-year average for this time of year, according to the latest EIA data.

Distillate inventories were up this week, by 1.295 million barrels. In the week prior, distillate inventories slid by 1.401 million barrels. Distillate inventories were already a startling 16% below the five-year average as of the week ending May 16, the latest EIA data shows.

Cushing inventories—the benchmark crude stored and traded at the key delivery point for U.S. futures contracts in Cushing, Oklahoma—fell by 342,000 barrels, the API data showed, compared to last week’s 443,000 barrel dip.

By Julianne Geiger for Oilprice.com

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