US crude stocks, gasoline and distillate inventories fall

U.S. crude inventories decreased by 2.8 million barrels, defying expectations of a 118,000-barrel increase, driven by a surge in crude exports to 4.3 million bpd, according to the EIA. Gasoline stocks also fell by 2.4 million barrels, while distillate stockpiles dropped by 724,000 barrels, with overall distillate fuel oil stocks hitting their lowest level since April 2005. Crude imports from Nigeria rose to 364,000 bpd, the highest since October 2019, amid an outage at Nigeria's Dangote refinery.

Analysis

U.S. energy inventories experienced significant declines last week, with crude oil stocks falling by 2.8 million barrels to 440.4 million barrels, sharply contrasting with analyst expectations for a 118,000-barrel increase. This draw was primarily driven by a substantial rise in U.S. crude exports, which surged by 794,000 barrels per day (bpd) to 4.3 million bpd. Concurrently, gasoline inventories decreased by 2.4 million barrels to 223.1 million barrels, substantially exceeding the anticipated 527,000-barrel draw, as gasoline supplied, a proxy for demand, rose to 9.45 million bpd from 8.64 million bpd ahead of the Memorial Day holiday. Distillate stockpiles also fell by 724,000 barrels to 103.4 million barrels, against forecasts of a 481,000-barrel rise, pushing U.S. distillate fuel oil stocks to their lowest level since April 2005. A notable development was the increase in crude imports from Nigeria to 364,000 bpd, the highest since October 2019, attributed to an unplanned outage at Nigeria's 650,000 bpd Dangote refinery. However, crude stocks at the Cushing, Oklahoma hub saw a modest increase of 75,000 barrels, and U.S. refinery crude runs declined by 162,000 bpd, with utilization rates falling by 0.5 percentage points to 90.2%. Despite the supportive inventory data, which led to a slight uptick in oil prices post-report, both Brent and WTI futures remained down for the day, trading at $64.34 and $61.20 per barrel respectively, indicating broader market pressures.