Commercial crude oil reserves fell sharply last week in the United States, according to figures released Wednesday by the U.S. Energy Information Agency (EIA), which also showed a further strengthening of demand.
For the week ended March 24, U.S. commercial inventories contracted by 7.5 million barrels, compared with analysts’ expectations of a 1.75 million increase, according to a Bloomberg consensus. Nevertheless, commercial reserves remain significantly higher than those measured a year ago (15% higher).
The surprise announcement initially sent black gold prices soaring, but the momentum faded after only a few minutes. Around 15:00 GMT, the price of a barrel of U.S. West Texas Intermediate (WTI) for delivery in May was up 0.50% at $73.57. This unexpected drop is explained, in part, by the acceleration of the activity of U.S. refineries, whose utilization rate climbed to 90.3%, compared to 88.6% the previous week, which increases their need for crude. The months of February and March traditionally correspond to a maintenance phase for refineries, which therefore often run at limited capacity, before ramping up as the start of the major travel season approaches at the end of May.
Moreover, the period was also marked by a slowdown in imports (-14% over one week), while exports held up better (-7%).
The EIA also noted new signs of strengthening U.S. demand (+2.2% over one week), which is now 3% above its level at this time last year. The spark came from gasoline, whose demand is at a three-month high, leading to a 2.9 million barrel drop in U.S. gasoline inventories last week. For Kpler’s Matt Smith, the renewed appetite for gasoline is being driven by attractive fuel prices. The average price of gasoline is 18% lower than last year at this time in the United States. Crude oil production fell slightly to 12.2 million barrels per day from 12.3 million.