US crude inventories fell by just a third of expected levels last week while fuel usage underwhelmed as well despite the Biden administration halting weekly additions of oil from the national reserve to the market, government data showed Wednesday
WASHINGTON (Pakistan Point News / Sputnik - 19th July, 2023) US crude inventories fell by just a third of expected levels last week while fuel usage underwhelmed as well despite the Biden administration halting weekly additions of oil from the national reserve to the market, government data showed Wednesday.
The US crude inventory balance fell by 708,000 barrels during the week ended July 14, the Weekly Petroleum Status Report from the Energy Information Administration, or EIA, showed. Industry analysts polled by US media had forecast a decline of 2.44 million barrels instead.
In the prior week to July 7, crude stockpiles surged by almost 6.0 million barrels, the most in a month.
The crude draw reported by the EIA did not come with its usual caveat - release of crude from the US Strategic Petroleum Reserve. For months now, weekly drawdowns from the reserve had been a point of contention for oil bulls, who said the additional oil had often suppressed crude prices from rallying.
The Biden administration's use of the SPR has, however, been a highly-charged matter for oil bulls and the president's political opponents. Both sides accuse him of indiscriminately releasing hundreds of millions of barrels from the stockpile to subdue crude prices and shore up his political standing with American voters - when the reserve is meant for emergency use, in times of critically shortage of oil supply.
Biden and the Democrats are up for reelection in November 2024.
Biden, in his defense, has said he was only acting to reduce record high pump prices of fuel, which stood at above $5 per gallon last June and fallen since to around $3.50. The administration also blames last year's high crude oil prices for US inflation getting to four-decade highs of above 9% in June 2020.
In the past couple of months, the administration canceled SPR sales mandated through 2024 and moved to refill the reserve, which has fallen to 40-year lows. Earlier this month, the Department of Energy announced buying plans for about 6 million barrels, on top of a previously-stated 12 million, and invited US energy companies to offer their selling prices.
On the gasoline inventory front, the EIA reported a draw of 1.066 million barrels for last week. Analysts had expected the agency to cite a decline of 1.577 million barrels instead, after a near unchanged level for gasoline in the prior week. Automotive fuel gasoline is the No. 1 US fuel product.
Finished motor gasoline products delivered to the marketplace - an indication of demand at the pump - fell to 8.855 million barrels from the prior week's 8.756 million. Typically, during summertime like this, some 9 million barrels of gasoline or more are supplied to the market weekly.
In the case of distillate stockpiles, the EIA reported a build of 14,000 barrels. Analysts had forecast a build of 460,000 barrels last week, against a previous surge of 4.815 million. Distillates are refined into heating oil, diesel for trucks, buses, trains and ships, and fuel for jets.
