US Crude Oil Inventories Continue Downward Plunge But Gasoline Surprises

Key Points:

• The American Petroleum Institute (API) reported a significant drop of 6.75 million barrels in US crude oil inventories for the week ending May 29, exceeding analyst expectations of a 3.6 million barrel decrease.
• Despite recent declines, US crude inventories have increased by 16 million barrels so far in 2024, while the Strategic Petroleum Reserve (SPR) continues to draw down, with 8 million barrels released last week, reducing SPR levels to their lowest since January 2024.
• US crude oil production rose slightly to 13.715 million barrels per day for the week ending May 22, marking an increase of 314,000 bpd compared to the previous year.
• Oil prices declined ahead of the data release, with Brent crude falling to $93.88 per barrel and WTI to $92.13, reflecting market concerns over a supply-demand imbalance and weakening crude demand from China.
• Gasoline inventories increased by 3.45 million barrels last week but remain 6% below the five-year average, while distillate inventories decreased further and are 11% below the five-year average, indicating ongoing tightness in refined product supplies.