Crude Oil Output Drops to a Two-Decades Low 🛢️ 📉 Market freezes after EIA report 📌

OIL futures are struggling for direction following today's EIA report pointing to a stronger-than-expected draw from the oil stockpiles. Additionally, OPEC’s oil output fell to its lowest level in more than two decades in May, dropping to about 16.13 million barrels per day, according to a Reuters survey.

Price is testing the 38.2% Fib retracement at 92.97 after a sharp sell-off from the 97.58 swing high. The highlighted candle cluster shows indecision at this level. EMA-48 (92.20) is flattening below EMA-240 (93.94), keeping the short-term bias bearish. RSI at 55.7 is recovering but not yet decisive. A rejection here targets the 23.6% level at 91.88, while a clean break above 93.85 (50% Fib) would shift momentum bullish. Source: xStation5

Headline inventory changes

Crude oil inventories drew down by 7.23 million barrels — more than three times the forecast of -2.2M and similarly to the prior week's -7.97M. Commercial crude stocks now sit at 426.5 million barrels, roughly 5% below the five-year seasonal average.

Other:

• Cushing, Oklahoma hub: -0.801M barrels (prior: -0.583M)

• Gasoline: +0.186M barrels (forecast: +1.0M — a significant miss)

• Distillate: -0.2M barrels (forecast: +0.171M)

• Total commercial petroleum inventories: -5.6M barrels on the week

Refinery operations

Refineries ran at 95.3% of operable capacity, processing 17.0 million barrels per day — up 80,000 bpd from the prior week. Gasoline production averaged 9.7M bpd and distillate output averaged 5.2M bpd, both higher week-on-week.

Imports and demand

Crude imports averaged 5.9 million barrels per day, down 0.5M bpd from the prior week and running 5.8% below the same four-week period last year. On the demand side, total products supplied over the past four weeks averaged 20.6M bpd, up 3.5% year-on-year. Distillate demand led the way, rising 7.2% year-on-year, while gasoline slipped 0.5% and jet fuel fell 2.2%.

Inventory levels vs. five-year average

Distillate stocks remain the most stretched, sitting 13% below the five-year average at 102.1 million barrels. Gasoline is 6% below average. Propane/propylene is the outlier on the other side — 35% above average at 22.8M barrels.

OPEC supply context

OPEC crude output fell 1.06 million barrels per day month-on-month in May, dropping to the lowest level in over two decades. The decline was driven mainly by a U.S. naval blockade on Iran and disruptions around the Strait of Hormuz, which sharply curtailed Gulf exports. Iran recorded the steepest fall, with Saudi Arabia also seeing declines, while Iraq, Venezuela and Nigeria partially offset losses. That backdrop reinforces the tightness implied by the consecutive large U.S. crude draws.