U.S. Crude Inventories Plunge by 7.2 Million Barrels, Sending Oil Prices Higher

U.S. commercial crude oil inventories registered a significant and unexpected decline of 7.2 million barrels for the week ended July 24, according to a report released Wednesday by the Energy Information Administration (EIA). The drawdown far surpassed the 1.3 million-barrel drop that analysts had forecast, signaling tighter market conditions.

Following the release of the bullish data, both major oil benchmarks surged. At 10:47 a.m. ET, Brent crude, the international benchmark, was trading 7.5% higher at $90.42 a barrel. West Texas Intermediate (WTI), the U.S. benchmark, climbed 7.5% to $85.22 a barrel.

Key Inventory Data

The EIA report revealed that commercial crude stockpiles, excluding the Strategic Petroleum Reserve (SPR), now stand at 404.5 million barrels, their lowest level since 2018. The data also highlighted tightening supply at a key delivery point and a multi-decade low for total national stocks.

• Total U.S. Stocks: Including the SPR, inventories fell by 11 million barrels to 712.2 million barrels, the lowest level recorded since 1984.
• Cushing Hub: Stockpiles at the Cushing, Oklahoma, delivery hub for WTI futures dropped by 771,000 barrels to 18.6 million barrels. This is the lowest level since 2014 and falls below the key 20 million-barrel operational threshold.

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Drivers of the Drawdown

The substantial drop in inventories was driven by a combination of increased refinery activity and a shift in trade flows. Refinery crude runs rose by 271,000 barrels per day (bpd) last week, with utilization rates increasing by 1.1 percentage points to 97.2%.

At the same time, crude exports edged higher to 3.5 million bpd, while net U.S. crude imports fell by 237,000 bpd. This combination of higher domestic processing and stronger foreign demand contributed to the significant weekly drawdown in stockpiles.