Oil prices are soaring as US crude oil inventories drop, according to a recent report from the U.S. Energy Information Administration (EIA). This data, released on Wednesday, reveals a 2.3 million barrel decrease in inventories during the week ending January 24, bringing commercial stockpiles to 423.8 million barrels. This is 3% below the five-year average for this time of year, indicating a significant shift in the market.
The EIA's findings align with API's figures released a day earlier, which also showed a decline in crude oil inventories. This coincides with a winter storm causing disruptions in US supply, leading to a rise in crude prices. At 8:45 a.m. in New York, Brent was trading at $68.11 per barrel, up 0.80% on the day and over $3 per barrel week-over-week. WTI was also trading up, by $0.61 per barrel (+0.98%) at $63 per barrel.
However, the story doesn't end there. The EIA also reported an increase in total motor gasoline inventories by 200,000 barrels, despite a 6 million barrel gain in the previous week. Average daily gasoline production has increased to 9.6 million barrels. For middle distillates, inventories rose by 300,000 barrels, but production decreased by 268,000 barrels daily, averaging 4.8 million barrels.
Total products supplied, a proxy for U.S. oil demand, rose to 20.3 million barrels per day over the last four weeks, a slight 0.1% decrease from the same period last year. Gasoline demand averaged 8.3 million barrels per day, while distillate four-week averages supplied averaged 3.7 million barrels, down 4.8% year-over-year.
This data highlights the complex dynamics in the oil market, with supply and demand factors playing a crucial role. As the industry continues to navigate geopolitical risks and weather disruptions, staying informed about these fluctuations is essential for investors and consumers alike.
