US Crude Inventories Post Modest Decline as Fuel Stockpiles Unexpectedly Rise

U.S. commercial crude oil inventories registered a smaller-than-expected decline last week, while stockpiles of refined fuels like gasoline and diesel unexpectedly swelled, signaling potential softness in energy demand.

The Energy Information Administration (EIA) reported on Wednesday that crude stockpiles fell by 640,000 barrels for the week ending September 11, missing analyst forecasts for a draw of 1.6 million barrels. Total U.S. crude inventories now stand at 423.4 million barrels.

Refined Product Inventories Build

The report's more surprising details came from refined products, where inventories grew against expectations of a decline. This data is closely watched by traders as an indicator of consumer and industrial fuel consumption.

• Gasoline inventories increased by 794,000 barrels, a sharp contrast to analyst predictions for a 1-million-barrel decrease.
• Distillate stockpiles, which include diesel and heating oil, rose by 1.6 million barrels, significantly overshooting expectations for a modest 71,000-barrel build.

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Inventories at the Cushing, Oklahoma delivery hub, the pricing point for U.S. crude futures, fell by 342,000 barrels during the same period.

Refinery Activity Slows

Underlying the inventory changes was a notable slowdown in refinery operations. The EIA reported that refinery utilization rates fell by 1 percentage point to 96.8% of total capacity. Refineries processed 256,000 fewer barrels per day compared to the prior week.

Additionally, net U.S. crude oil imports saw a significant drop, falling by 1.18 million barrels per day. This reduction in imports was a key factor contributing to the headline draw in crude inventories, but the build in fuel stocks points to a more complex supply-and-demand picture that could weigh on energy markets.