The U.S. Energy Information Administration (EIA) reported a significant drop in commercial crude oil inventories, excluding the Strategic Petroleum Reserve (SPR), to 415.6 million barrels as of October 9. This represents a 2.0% weekly decline and a 1.9% year-over-year decrease. The drop follows a 30.6% annual decline in SPR stocks, which remained flat week on week. Total petroleum stocks, including crude oil, gasoline, and other products, fell by 13.4 million barrels, reflecting a broader trend of inventory reductions.
The EIA noted that U.S. refineries processed 16.6 million barrels per day, up from the previous week, with gasoline output averaging 9.2 million barrels per day. Distillate production, however, decreased to 5.2 million barrels per day. Crude oil imports dropped by 791,000 barrels per day to 6.0 million barrels per day, below the four-week average. Analysts suggest that the inventory draw is partly due to production disruptions caused by Hurricane Isaias, which also led to a decline in crude production.
Ole Hansen of Saxo Bank highlighted that the draw signals stronger near-term demand, despite ongoing concerns about global supply and consumption. He noted that while gasoline demand is easing, diesel markets are tightening due to high domestic consumption and exports. Naeem Aslam of Zaye Capital Markets pointed out that the sharp inventory decline pushed WTI prices higher, though broader market concerns remain. Macquarie strategists also anticipated a large draw, citing Gulf shut-ins, low imports, and high exports as contributing factors.