Energy Insights – Crude Inventories and Fuel Stock Trends

Crude Inventories Surge Unexpectedly

U.S. crude oil inventories experienced a notable increase of 4.753 million barrels for the week ending November 8, according to the American Petroleum Institute (API). This figure significantly surpassed analysts’ predictions of an 800,000-barrel rise, indicating shifts in market dynamics.

To put this in context, crude oil inventories have risen by less than 1 million barrels year-to-date, suggesting a relatively stable supply environment despite this recent spike.

Strategic Petroleum Reserve (SPR) Sees Modest Growth

The Department of Energy (DoE) reported a 1.4-million-barrel increase in the Strategic Petroleum Reserve (SPR) as of November 15, bringing total reserves to 389.2 million barrels. While this marks a recovery from last summer’s multi-decade low, it still falls 246 million barrels short of the levels seen when President Biden took office.

Fuel Stocks Continue to Decline

Gasoline inventories fell by 2.48 million barrels this week, a sharp drop compared to last week’s slight increase of 312,000 barrels. These inventories are now 4% below the five-year average, indicating tightening supplies. Distillate inventories also decreased by 688,000 barrels, continuing a downward trend, and are now 5% below the five-year average.

Cushing Inventories Follow Decline

Cushing, Oklahoma, the primary hub for U.S. crude storage, saw a reduction of 288,000 barrels this week, adding to the previous week’s decline of 1.859 million barrels.

Oil Prices Hold Firm

Oil prices remained stable despite the fluctuations in inventory:

Brent crude closed at $73.42, an increase of $1.50 per barrel from the previous week.

WTI settled at $69.60, gaining $1.60 per barrel week-on-week.

This price support was partly influenced by geopolitical developments, including the U.S. approval for Ukraine to utilize U.S.-manufactured missiles on Russian territory and disruptions at Johan Sverdrup.

What It Means for Energy Markets

As crude inventories increase, the drop in fuel stocks highlights possible supply issues, especially for gasoline and distillates. These developments could affect energy prices and availability as we approach the colder months.

Stay Ahead with the American Energy Fund

At American Energy Fund, we monitor these changes closely and offer insights that help you stay informed and prepared for market fluctuations.

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