10.09 – Weekly change in crude oil and distillate inventories (EIA)
- Crude oil inventories: -0.39 mn (Expected: -1.3 mn; Previous: -4.45 mn)
- Gasoline inventories: +1.27 mn (Expected: -1.3 mn; Previous: -1.17 mn)
- Distillate inventories: +2.09 mn (Expected: -0.2 mn; Previous: +0.8 mn)
The report’s takeaway can be assessed as moderately negative for inflation. A smaller-than-expected draw in crude was accompanied by a large increase in fuel inventories.
The EIA print surprised the market with exceptionally strong supply, which may be a consequence of the earlier price increase that is gradually starting to normalize on the supply side. Despite expensive crude and gasoline, inventories rose more than expected. This is not contradictory: high prices and margins encourage refineries to ramp up production, while expensive fuels can curb consumption. In that case, inventories begin to build.
- Refineries operated at 97.8% utilization, increasing distillate production to 5.3 million barrels per day.
- Despite the rebuild, distillate inventories remain 13% below the five-year average for this period.
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