U.S. crude oil and gasoline inventories saw an increase last week due to higher refinery production and a record level of U.S. crude output, according to data released by the U.S. Energy Information Administration (EIA).

Crude Oil Stockpiles

Commercial crude oil stockpiles, excluding the Strategic Petroleum Reserve (SPR), rose by 2.9 million barrels to reach 443.7 million barrels in the week ending December 15th. Although this is about 1% below the five-year average for this time of year, it was contrary to the predictions of analysts surveyed by The Wall Street Journal, who had expected a decrease of 2.5 million barrels in crude stockpiles.

Strategic Petroleum Reserve (SPR)

Storage in the SPR saw an increase of 629,000 barrels, bringing the total to 352.5 million barrels.

Cushing, Oklahoma

Oil stored at Cushing, Oklahoma, the delivery hub for Nymex, also experienced an increase of 1.7 million barrels, reaching a total of 32.5 million barrels.

U.S. Crude Oil Production

U.S. crude oil production reached a record of 13.3 million barrels per day, marking an increase of 200,000 barrels per day compared to the previous week and 1.2 million barrels per day higher than the previous year, as reported by the EIA.

According to Robert Yawger, executive director for energy futures at Mizuho Securities USA, this increase in U.S. production is a significant development in the oil market. With production cuts affecting Saudi Arabia and Russia due to OPEC+ agreements, the U.S. is now considered to be the global swing producer with the capacity to fill any order for size. Additionally, concerns about threats to shipping in the Red Sea may lead global oil customers to turn to U.S. barrels.

Crude Oil Exports and Imports

U.S. crude oil exports saw a rise of 350,000 barrels per day last week, reaching a total of 4.1 million barrels per day. Imports also increased by 233,000 barrels per day to reach 6.8 million barrels per day, according to the EIA.

This latest data reflects the dynamics of the U.S. oil market, with increasing stockpiles and production reaching record levels. With the U.S. now positioned as a global swing producer, it will be interesting to see how these developments impact both domestic and international markets in the coming weeks.

Crude Futures Rise Amid Concerns Over Red Sea Attacks

Crude futures experienced a modest increase on Wednesday afternoon, reaching their highest point since the beginning of December. This rise comes as worries about Houthi rebel attacks on shipping in the Red Sea raise concerns about potential transport delays and higher costs.

The Nymex crude contract for February saw a 0.2% increase, reaching $74.06 per barrel, while February Brent experienced a 0.4% increase, reaching $79.51 per barrel.

Gasoline Stockpiles and Demand

Gasoline stockpiles saw a significant rise of 2.7 million barrels, reaching a total of 226.7 million barrels. This is considerably higher than the expected 700,000-barrel increase according to a survey by the Journal. Despite this increase, gasoline inventories remain approximately 2% below their five-year average as reported by the EIA.

Although gasoline production saw growth from 9.5 million to 10 million barrels a day, demand, measured by product supplied, declined by 105,000 barrels a day, reaching a total of 8.8 million barrels a day according to the EIA.

Distillate Stocks and Refinery Utilization

Distillate stocks, primarily consisting of diesel fuel, saw an increase of 1.5 million barrels, reaching a total of 115 million barrels. This falls short of expectations for a 700,000-barrel build.

The refining capacity utilization rate experienced a 2.2 percentage point increase, reaching 92.4%. This surpasses the rate of 90.9% from the previous year. Expectations were for refinery runs to increase by 0.2 percentage points, reaching 90.4%.

Change in U.S. Oil Inventories

Here are the changes in U.S. oil inventories for the week ended December 15:

  • Crude: 2.9 million barrels
  • Gasoline: 2.7 million barrels
  • Distillates: 1.5 million barrels
  • Refinery Use: 2.2 percentage points

The EIA's forecast initially predicted a decrease of 2.5 million barrels for crude inventories, a 0.7 million barrel increase for gasoline inventories, a 0.7 million barrel increase for distillate inventories, and a 0.2 percentage point increase for refinery use.

Note: All numbers are in millions of barrels, except for refinery use which is measured in percentage points.

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