Key facts
- U.S. gasoline inventories fell by 47.5 million barrels between early February and late May.
- The current inventory level of 211.6 million barrels is the lowest May reading since 2014.
- The rate of inventory drawdown is historically unprecedented for the February-to-May period.
- Strong refinery activity and modest demand growth do not fully explain the rapid inventory decline.
- Increased net exports of crude oil and petroleum products are contributing to the drawdown.
- Strategic Petroleum Reserve inventories have seen the largest weekly withdrawals in history.
U.S. gasoline inventories are declining at a historically rapid pace, drawing down a significant cushion before the summer driving season. For the week ending May 22, inventories stood at 211.6 million barrels, the lowest May level since 2014, though not an immediate alarm signal on its own.
The more striking trend is the speed of the drawdown: 47.5 million barrels have been depleted in roughly 15 weeks since early February. This decline is significantly larger than any comparable period in weekly EIA data dating back to 1990.
Despite strong refinery activity, with inputs averaging nearly 17.0 million barrels per day and utilization at 94.5%, gasoline stocks fell an additional 2.6 million barrels in the latest week. Finished gasoline production was robust, but this activity has not stabilized inventories.
Demand does not fully explain the situation, as gasoline supplied was actually below last year's level. The mystery lies in why inventories are falling so quickly despite strong refinery runs and only modest demand growth.
Global market dynamics are playing a significant role, with the U.S. acting as a substantial net exporter of crude oil and petroleum products. Product exports are also running well above last year's levels, indicating U.S. barrels are moving to higher-value global markets.
The closure of the Strait of Hormuz has added strain to the global oil system, though markets are currently pricing in a potential resolution. The inventory trend suggests the market is consuming its cushion while awaiting such a resolution.
Strategic Petroleum Reserve (SPR) inventories also saw significant weekly withdrawals, falling by 9.1 million barrels. While SPR releases support crude availability for refiners, crude must still be processed into gasoline. Distillate inventories, including diesel, also fell and remain below normal, impacting broader supply chain costs.
The rapid depletion of gasoline stocks suggests the fuel market is absorbing more stress than headline inventory levels indicate, potentially from elevated exports, global supply disruptions, refinery constraints, and difficulties rebuilding product stocks at high utilization rates.