Inventory Builds Defy Market Expectations
Commercial crude inventories increased by 1.3 million barrels, lifting total stocks to 443.2 million barrels—6% below the five-year seasonal average. The build diverged sharply from consensus expectations for a 900,000 barrel draw. Gasoline inventories rose by 0.8 million barrels and remain 2% below seasonal norms. Distillate stocks gained 0.6 million barrels but sit 16% below the five-year average. Propane/propylene inventories climbed by 2.7 million barrels but also remain historically tight.
Imports Strengthen, Despite Annual Decline
Crude oil imports averaged 6.1 million barrels per day, an increase of 247,000 barrels from the previous week. However, the four-week average remains down 13.5% year-on-year, reflecting longer-term import weakness. Motor gasoline imports averaged 747,000 barrels per day, while distillate imports stood at 141,000 barrels per day, both contributing to the weekly inventory builds.
Demand Data Points to Slowing Consumption
Total petroleum products supplied averaged 19.6 million barrels per day over the past four weeks, a 2.8% decline from the same period last year. Gasoline demand slipped 1%, and distillate fuel demand fell 4.2%. Only jet fuel showed strength, rising 4% year-over-year, reflecting recovering travel trends.
Market Forecast: Short-Term Bearish Outlook
With the market expecting a drawdown but instead facing a crude inventory build and weakening product demand, the near-term outlook is bearish. The surprise surplus may pressure WTI and Brent prices, especially if upcoming data continue to show lackluster consumption. Traders should monitor refinery runs and demand trends closely for any reversal signals.
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James Hyerczyk