Key facts
- API reported a surprise build of 9.072 million barrels in US crude oil inventories for the week ending August 7.
- Analysts had expected a draw of 500,000 barrels.
- Higher crude imports relative to exports contributed to the inventory build.
- The Strategic Petroleum Reserve (SPR) saw a draw of 6.1 million barrels.
- Gasoline inventories decreased by 1.531 million barrels, while distillate inventories fell by 596,000 barrels.
The American Petroleum Institute (API) reported a significant surprise build in U.S. crude oil inventories for the week ending August 7, estimating an increase of 9.072 million barrels. This figure sharply contrasted with analyst expectations, which had predicted a draw of 500,000 barrels. The previous week had seen an increase of 2.69 million barrels.
The larger-than-expected build was partly attributed to an increase in crude oil imports relative to exports during the reporting period. Despite this build, commercial crude oil inventories, excluding the Strategic Petroleum Reserve (SPR), have seen a net decrease of over 49 million barrels in the last seventeen weeks. Year-to-date, U.S. crude inventories have risen by 1.88 million barrels, a figure kept in check by substantial draws from the SPR.
For the week ending August 7, the SPR released another 6.1 million barrels, bringing its total reserves down to 298.7 million barrels. This level is 433 million barrels below maximum capacity. The generally accepted operational minimum for the SPR is between 250 and 300 million barrels, below which efficient pumping and processing could become challenging.
U.S. crude oil production for the week ending July 31 increased to 13.804 million barrels per day (bpd), a slight rise from 13.796 million bpd in the prior week and a significant increase of 600,000 bpd compared to the same period last year.
Gasoline inventories decreased by 1.531 million barrels in the week ending August 7, following a smaller increase of 156,000 barrels in the prior week. Gasoline inventories were already 7% below the five-year average prior to this report. Distillate inventories also fell, by 596,000 barrels, after a 1.2 million barrel decrease in the previous week, and were 12% below the five-year average. Inventories at Cushing, the delivery hub for WTI futures, rose by 1.571 million barrels, following a 2.358 million barrel increase in the week prior.