Crude inventories fall more than expected, but oil markets still under pressure.

Crude inventories fall more than expected, but oil markets remain under pressure.

Highlights

• U.S. crude oil inventories saw a significant decrease of 6.1 million barrels compared to the previous week.
• Domestic oil production in the U.S. slightly declined from 12.8 million barrels per day (bpd) to 12.7 million bpd.
• The Strategic Petroleum Reserve, a stockpile of emergency crude oil, increased from 348.4 million bpd to 348.9 million bpd.

On August 23, the Energy Information Administration (EIA) published its Weekly Petroleum Status Report, revealing that U.S. crude inventories experienced a larger-than-expected decline of 6.1 million barrels. This was significantly higher than the analyst consensus of -2.85 million barrels. Currently, U.S. crude oil inventories are approximately 2% below the five-year average for this time of the year.

In contrast, total motor gasoline inventories increased by 1.5 million barrels compared to the previous week, while distillate fuel inventories grew by 0.9 million barrels. U.S. crude oil imports experienced a decline of 0.23 million barrels per day (bpd), falling to 6.9 million bpd.

Although there was a modest increase, the U.S. continued to purchase oil for the Strategic Petroleum Reserve (SPR), with the SPR growing from 348.4 million barrels to 348.9 million barrels.

Furthermore, domestic oil production in the U.S. decreased slightly from 12.8 million bpd to 12.7 million bpd, remaining close to multi-month highs.

Following the release of the EIA report, WTI oil prices showed some upward movement and attempted to settle above the $78.50 level. However, oil markets are currently under pressure as traders react to disappointing Manufacturing PMI reports from various countries. Recession concerns have also contributed to the downward pressure on Brent oil, which settled near the $82.50 level. It remains to be seen whether the EIA report will provide sufficient support to the oil markets today.