Gasoline Stockpile Drops by 3.1 Million Barrels

Crude oil stocks surged by 5.5 million barrels, surpassing predictions from analysts.

Highlights

• Gasoline stockpiles fell short of analyst forecasts.
• Domestic oil output rose from 13.0 million bpd to 13.3 million bpd.
• The Strategic Petroleum Reserve expanded from 357.4 million barrels to 358 million barrels.  

On February 7, the Weekly Petroleum Status Report by the EIA revealed a 5.5 million barrel increase in crude inventories compared to the previous week, surpassing the analyst consensus of +1.9 million barrels. At present, crude inventories stand about 4% lower than the five-year average for this period.

Motor gasoline inventories decreased by 3.1 million barrels, defying the analysts' expectation of a 0.14 million barrel increase. Meanwhile, distillate fuel inventories dropped by 3.2 million barrels.

Crude oil imports rose by 1.3 million bpd from the prior week, averaging 6.9 million barrels.

The Strategic Petroleum Reserve grew from 357.4 million barrels to 358 million barrels as the U.S. continued oil purchases for reserves.

Domestic oil production surged from 13.0 million bpd to 13.3 million bpd, consistent with recent quarterly reports indicating planned production increases by U.S. oil companies.

WTI oil surpassed the $74.00 mark as traders reacted to the EIA reports. Brent oil also climbed above $79.00. Traders overlooked the rise in domestic oil production and focused on the decline in gasoline inventories, indicating robust demand. Additionally, the ongoing purchases for the Strategic Petroleum Reserve are positive for oil markets.

Traders will remain vigilant regarding developments in the Israel-Hamas conflict. Hamas proposed a Gaza truce involving complete withdrawal of Israeli forces, a demand not acceptable to Israel. This may lead to an increase in oil's geopolitical premium, potentially benefiting oil markets.