The week ending March 15 saw US crude oil inventories fall by 2 million barrels, beating analysts’ forecast of 1.5 million. This drop exceeds established estimates, signalling an unexpected dynamic in the market. Theincrease in refining activity also contributed to this reduction, reflecting a stronger-than-expected post-maintenance recovery.
Increase in refining activity
The refinery utilization rate climbed to 87.8%, marking a significant increase on the previous week. This increase reflects the end of the maintenance season and leads to a mechanical reduction in crude oil inventories for refining. Matt Smith of Kpler notes that refining operations have peaked over nine weeks, contributing to the modest reduction in reserves.
Support from robust exports
U.S. crude oil exports surged to 4.8 million barrels per day, thanks to an increase of 1.7 million. This vigorous export drive supports demand and plays a key role in the current market context. The positive impact of this trend on oil prices underlines the importance of trade flows in the global supply/demand equation.
Subsequent reduction in gasoline inventories
At the same time, gasoline inventories fell by 3.3 million barrels, exceeding expectations and marking the seventh consecutive week of decline. This trend suggests an increase in demand for refined products in the United States, ahead of the car travel season. The implications for the oil market are significant, pointing to robust demand despite a traditionally quieter season.
Crude oil production in the United States remained stable at 13.1 million barrels per day, keeping levels close to all-time highs. This constancy in production, combined with an increase in refined product deliveries, paints a picture of resilience and adaptability in the US energy sector in the face of market challenges.
