Key facts
- US crude oil inventories increased by 2.69 million barrels in the week ending July 30.
- Strategic Petroleum Reserve (SPR) inventories fell by 2.9 million barrels, reaching a 43-year low.
- Brent crude prices dropped 5.41% to $79.24 per barrel, and WTI fell 5.75% to $75.97 per barrel.
- Market speculation of a potential Iran-US peace deal influenced the decline in oil prices.
- Gasoline inventories saw a small increase, while distillate inventories decreased.
Crude oil inventories in the United States unexpectedly increased by 2.69 million barrels in the week ending July 30, according to estimates from the American Petroleum Institute (API). This build contrasts with analyst expectations for a 2 million barrel draw and follows a 3.3 million barrel decrease in the prior week.
Despite the recent build, US commercial crude oil inventories have seen significant draws over the past sixteen weeks, losing just over 58 million barrels. However, year-to-date, US crude inventories are down only 7.2 million barrels, largely due to strategic draws. The Strategic Petroleum Reserve (SPR) saw another decrease of 2.9 million barrels in the week ending July 31, bringing its total to 304.8 million barrels. This level represents the lowest in over 43 years and is 427 million barrels shy of maximum capacity. The operational minimum for the SPR is generally considered to be between 250-300 million barrels.
US crude oil production for the week ending July 24 was slightly down at 13.796 million barrels per day, though it remains higher than a year ago. The market reacted to rumors of a potential peace deal between Iran and the United States, causing oil prices to fall. Brent crude was trading down 5.41% at $79.24 per barrel, and WTI crude was down 5.75% at $75.97 per barrel.
Gasoline inventories rose by 156,000 barrels, while distillate inventories fell by 1.2 million barrels. Gasoline inventories were already 6% below the five-year average, and distillate inventories were 9% below the five-year average heading into this reporting period. Inventories at Cushing, Oklahoma, the delivery hub for WTI futures, increased by 2.358 million barrels.