Crude Inventories Fall by 3.6 Million Barrels; WTI Oil Tests Multi-Week Highs

The EIA's Weekly Petroleum Status Report showed a larger-than-expected crude inventory draw of 3.6 million barrels, while gasoline inventories rose against expectations by 1.5 million barrels. Crude imports declined to 6.2 million bpd, and domestic oil production edged up to 13.428 million bpd as the U.S. continues to replenish the Strategic Petroleum Reserve; WTI and Brent crude prices rose above $66.50 and $68.00, respectively, driven by the inventory data and U.S.-China trade developments.

Analysis

The U.S. Energy Information Administration's (EIA) report for the week ending June 11, 2025, revealed a more substantial drawdown in crude oil inventories than anticipated, with a decrease of 3.6 million barrels against a consensus forecast of a 2.0 million barrel decline. This reduction places current crude inventories approximately 8% below the five-year average for this period and follows a significant 4.3 million barrel decrease in the prior week, signaling tightening supply conditions for crude. However, the report also indicated a build in refined products, as total motor gasoline inventories unexpectedly increased by 1.5 million barrels, contrasting with analyst expectations for a 0.9 million barrel draw, and distillate fuel inventories rose by 1.2 million barrels. On the supply side, crude oil imports saw a modest decline of 170,000 barrels per day (bpd) to an average of 6.2 million bpd, while domestic oil production edged higher by 20,000 bpd to 13.428 million bpd, suggesting a slow recovery in U.S. output. The U.S. also continued to replenish its Strategic Petroleum Reserve, which increased by 0.3 million barrels to 402.1 million barrels. The oil markets responded to these mixed signals, with the larger-than-expected crude draw and positive sentiment from the U.S.-China trade deal contributing to WTI crude attempting to settle above $66.50 per barrel and Brent crude surpassing the $68.00 level.

Key Decisions for Investors

• Investors should recognize the bullish implications of the larger-than-expected crude oil drawdown, which now sits 8% below the five-year average, while also acknowledging the counteracting bearish pressure from the surprising build in gasoline and distillate inventories.
• Continued monitoring of U.S. domestic oil production, currently at 13.428 million bpd and slowly recovering, alongside the steady, albeit modest, demand from Strategic Petroleum Reserve replenishment, is crucial for assessing future supply-demand balances.
• Factor in the significant influence of macroeconomic developments, such as the U.S.-China trade deal, which is currently supporting prices but represents a key external variable that could shift market sentiment for WTI and Brent, currently trading above $66.50 and $68.00 respectively.