US Crude Inventories Fall by 4.5 Million Barrels, Far Exceeding Forecasts

U.S. crude oil inventories saw a significant decline last week, falling by 4.5 million barrels, a far larger draw than the 1.1 million-barrel drop analysts had forecast. The data, released by the U.S. Energy Information Administration (EIA), showed total commercial stockpiles stood at 424.5 million barrels for the week ending August 28.

Refined Products Show Mixed Results

The large crude draw was accompanied by a mixed report for refined fuels. Gasoline inventories decreased by 1.2 million barrels to 205.7 million barrels. However, this was a smaller decline than the 1.8 million-barrel draw that analysts had expected.

In a notable reversal of expectations, distillate fuel stockpiles, which include diesel and heating oil, unexpectedly rose. Inventories increased by 800,000 barrels to 104.2 million barrels, contrary to forecasts for a 1.3 million-barrel decrease.

Refinery Activity Ramps Up

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The substantial draw on crude inventories was supported by a notable increase in refinery activity. According to the EIA report, key operational figures included:

• Refinery crude processing: Increased by 103,000 barrels per day.
• Refinery utilization rates: Rose by 0.6 percentage points to a high of 98%.
• Crude stocks at Cushing, Oklahoma: The delivery hub for the WTI contract saw a minor build of 80,000 barrels.

The data also showed that U.S. net crude oil imports fell by 79,000 barrels per day over the week. The larger-than-expected crude draw is typically a bullish signal for oil prices, but the surprise build in distillates and a smaller-than-forecast gasoline draw could suggest that end-user demand may be softening.