US crude oil inventories increased by 3,614,000 barrels, surpassing the anticipated 341,000. The previous week saw a decline of 2,332,000 barrels.
Gasoline inventories fell by 1,433,000 barrels, compared to the expected drop of 369,000. Distillate stocks decreased by 1,318,000 barrels, while a rise of 220,000 was forecasted.
Refinery utilisation decreased by 0.6%, contrary to an expected increase of 0.2%. Late private data reported a decline in crude oil of 1,455,000 barrels and gasoline of 1,249,000, while distillates increased by 1,136,000 barrels.
Wti Crude Prices Drop
WTI crude oil priced at $65.93 today, marking the lowest level since September. US production is expected to decline this year if prices remain at this level.
A sharp rise in crude inventories suggests weaker demand or stronger supply than anticipated. The stockpile increase of over 3.6 million barrels is far beyond the expected build, which was just over 300,000. In contrast, the previous week saw a drawdown, making this shift more pronounced. When crude stocks grow at this pace, it often indicates that refineries are not processing as much, exports are slower, or production is outpacing consumption. This change in supply dynamics affects short-term pricing and market sentiment.
Petrol inventories continued their downward movement, shedding over 1.4 million barrels, which was a much steeper drop than projected. With distillates also falling when an increase was expected, it points to either stronger-than-predicted consumption or supply chain adjustments. The fact that refinery utilisation edged down rather than increasing adds another layer of constraint. If refineries are cutting back on output, it suggests a pullback in margins or a shift in operational plans.
Market Reactions And Forecasts
Private data released earlier had forecasted a crude drawdown, but government figures contradicted this. Such discrepancies are not unusual but can shape reactions when markets open to fresh data. Private reports pointed to a decline in crude and petrol but showed that distillates had grown. When official numbers move in the opposite direction to industry expectations, it adds uncertainty and can lead to quick shifts in pricing strategies.
With WTI crude slipping below $66, its lowest since September, pressure on US producers rises. If prices remain near these levels, production growth forecasts may be revised downward. Lower pricing discourages expansion, particularly for operations with higher extraction costs. Should this persist, supply adjustments may follow, though the timing would depend on broader economic indicators and policy shifts. When storage builds and demand signals soften, price recoveries can take longer.
