Oil Stocks Decline, Supply Risks Intensify

U.S. crude oil inventories fell by 1.9 million barrels to 410.6 million barrels for the week ending October 23. This decline stands in stark contrast to market expectations, which had anticipated a slight increase, suggesting that U.S. oil supply conditions are tighter than previously estimated.

Oil prices maintained their gains following the report. Brent crude stood at US$115.66 per barrel, while WTI reached US$102.38 per barrel. A drop in stocks at Cushing, Oklahoma—a key hub—further bolstered market sentiment.

Oil inventories in the Gulf Coast region fell to their lowest level since December 2024. This is particularly significant, as the region serves as a vital center for U.S. oil storage and distribution.

In terms of trade, U.S. net crude oil imports fell by approximately 796,000 barrels per day, while exports rose by 1.4 million barrels per day to reach 4.85 million barrels per day. However, Kpler noted that the export figures reported by the EIA are higher than those derived from their own tracking data.

Regarding refined products, inventories of distillates—which include diesel and heating oil—fell by 1.5 million barrels to 102.8 million barrels. This decline exceeded expectations, even as demand for distillates rose by approximately 475,000 barrels per day.

Conversely, gasoline inventories increased by 3.9 million barrels to 209.2 million barrels, defying expectations of a decline. Gasoline demand also fell by approximately 622,000 barrels per day, while the U.S. refinery utilization rate softened to 92.8%.

Newsmaker Analysis: The decline in crude oil and distillate stocks has fostered a bullish sentiment, as it indicates that supply constraints remain significant. Nevertheless, the rise in gasoline inventories and discrepancies in export estimates suggest that the market must continue to closely monitor the balance between supply and demand. This situation has the potential to keep oil prices high in the short term.

Source: Newsmaker.id