Last week, crude oil stocks in the U.S. saw a decline that was larger than anticipated by analysts. According to data from the U.S. Energy Information Administration (EIA), reserves decreased by 1 million barrels, much more than the 400,000 barrels drop forecasted by experts. This represents the ninth consecutive reduction in oil reserves in the country.
U.S. Production Stable but Affected by Data Corrections
Crude oil production in the U.S. remained stable at 13.48 million barrels per day, showing no significant change from the previous week. However, some analysts point out that the EIA had to apply a “correction factor” of nearly 900,000 barrels per day. According to Matt Smith, an analyst at Kpler, this correction is related to an “overestimation” of crude oil production by the EIA in previous weeks. “There have likely been production freezes, which explains the apparent stability of U.S. production,” says Smith.
The Role of Refineries and Forecasts for Stock Increase
During the week ending January 17, U.S. refineries reduced their activity, operating at only 85.9% of their capacity, down from 91.7% the previous week. This decline in refinery activity contributed to the drop in stocks. However, experts suggest that crude oil inventories are likely to increase in the coming weeks, supported by a return of production and the entry of refineries into their planned maintenance period.
Increase in Crude Oil Exports and Imports
Meanwhile, the U.S. saw a significant increase in its crude oil exports and imports. Exports rose by 10.72% compared to the previous week, while imports grew by 10.14%. However, Matt Smith warns that exports are likely to decline in the next EIA report, as several Gulf Coast ports were closed or affected by adverse weather conditions.
Stock Situation at Cushing and Impact on Oil Prices
Crude oil stocks at the Cushing delivery hub in Oklahoma, the primary terminal for West Texas Intermediate (WTI), saw a slight increase of about 100,000 barrels. This rise could affect oil prices, particularly WTI, which saw its price for March delivery drop by 0.36%, reaching $75.08 at the market close.
##
