Key facts
- Brent crude prices are rising toward $100 per barrel.
- US crude oil inventories fell by 6.8 million barrels according to API data.
- Cushing inventories decreased by 279,000 barrels.
- Gasoline stocks increased by 3.5 million barrels, the largest build since January.
- US crude stocks have fallen for six consecutive weeks.
- Gasoline stocks are at their lowest level for this time of year since 2014.
Oil prices are rising toward $100 per barrel, influenced by geopolitical tensions and significant inventory draws. The US military reported that Iran fired missiles toward Kuwait and Bahrain, which failed to hit their targets, and the US subsequently struck an Iranian military control station in the Strait of Hormuz. Weekly data from API showed crude inventories falling by 6.8 million barrels, Cushing inventories down 279,000 barrels, gasoline stocks up 3.5 million barrels, and distillates up 214,000 barrels. The Department of Energy (DOE) reported a larger crude draw of 7.97 million barrels, a Cushing draw of 583,000 barrels, a gasoline build of 3.36 million barrels, and a distillate build of 1.50 million barrels. US crude stocks have now fallen for six consecutive weeks, with Cushing inventories nearing tank bottoms. Gasoline stocks, despite the recent build, are at their lowest level for this time of year since 2014. The Strategic Petroleum Reserve has seen a drawdown of 58 million barrels since the start of the war. Analysts at Macquarie noted that the market has been cushioned by SPR and product draws, but if the Strait of Hormuz remains closed past Labor Day on September 7, physical availability will tighten materially, potentially leading to significantly higher prices.