Energy Analytics

Crude Oil Inventory Draw First Time in 3 Weeks Lends Some Support to Prices



US crude oil stocks posted a decrease of 2.7 MMBbl from last week. Gasoline and distillate inventories increased by 0.3 MMBbl and 2.6 MMBbl, respectively. Yesterday afternoon, API reported a crude oil draw of 3.5 MMBbl, while reporting a gasoline draw of 0.4 MMBbl and a distillate build of 1.8 MMBbl. Analysts were expecting a crude oil draw of 1.9 MMBbl. The most important number to keep an eye on, total petroleum inventories, posted an increase of 4.0 MMBbl. For a summary of the crude oil and petroleum product stock movements, see the table below.

US crude oil production remained unchanged last week, per the EIA. Crude oil imports were down 0.49 MMBbl/d last week, to an average of 7.2 MMBbl/d. Refinery inputs averaged 17.7 MMBbl/d (0.40 MMBbl/d more than last week’s average), leading to a utilization rate of 95.9%. The crude oil draw for the first time in three weeks brought some support to prices, but the total petroleum stocks build is limiting the price gain. Prompt-month WTI was trading up $0.30/Bbl, at $56.43/Bbl, at the time of writing.

Prices dipped below the $55/Bbl level last Wednesday, after disappointing global economic data as well as the inversion of US bonds, which increased concerns of a possible recession. Since then prices have recovered some of their losses due to a slight softening of the trade war between the US and China. The optimism regarding a possible thaw of US–China tensions came after US President Donald Trump remarked that he would be talking with Chinese President Xi Jinping to discuss trade issues, and was furthered bolstered by the US stating it would extend a reprieve that permits China’s Huawei Technologies to buy components from US companies. The hopes that major economies around the globe will take stimulus measures to battle the economic slowdown also gave some support to prices. Although there is some hope that US–China tensions will ease off and major governments will become more aggressive in delivering stimulus, the current gloomy outlook on global economic health and demand projections, as well as the warnings from OPEC and IEA reports that an oil glut in 2020 is likely, are still keeping the pressure on prices and limiting any significant gains.

In addition to expectations of greater monetary stimulus by central banks across the globe to battle a possible recession, prices also got support from a drone attack by the Houthi group on an oilfield in eastern Saudi Arabia on Saturday. The attack caused a fire at a gas plant, adding more concern to existing tensions in the Middle East and possible supply disruptions in the region. However, the effect on prices were minimal, as Saudi Aramco stated that oil production was not affected, and because the market seems to keep its focus on the gloomy and further-deteriorating global economic health and demand projections.

Evidence is mounting that without a large reduction in output from OPEC or some level of conflict occurring with Iran, price rallies (up to $61 to $64) will be sold until the tariff issues between the US and China come to some sort of pause or solution. The market remains within a range of $50 to $61. Expect this type of environment to continue until further evidence of solutions occur. That said, due to the precarious nature of the tariff struggle, there remains the possibility of China ignoring the bans on buying Iranian crude (in place of US crude) as a retaliatory posture, likely pressuring prices below $50. This event could flood the global crude market going into an already oversupplied 2020.

Petroleum Stocks Chart

Picture of Enverus


Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

Power and Renewables
ByEvan Powell

Southern Company (SoCo), a leading energy provider in the United States, has established itself through a commitment to reliability and innovation in generation, transmission and wholesale energy.

Enverus Press Release - Canadian oil sands: Back in the limelight
Power and Renewables
ByRob Allerman

Summer season outlook for the ERCOT, PJM, and MISO power markets

Enverus Press Release - Surfing Europe’s green wave
Power and Renewables
ByRob Allerman

Welcome to our summer outlook for Southwest Power Pool (SPP) for the summer of 2024. We’ll be looking at insights into weather forecasts, load predictions, renewable energy expectations, transmission updates and potential congestion issues and break down the information by...

Energy Transition Financial Services
ByRyan Notacker

A look at the capital pools available to different energy transition technologies.

Energy Analytics Operators
ByAndrew Dittmar

Joining a hyperactive M&A market, Devon Energy (ranked ninth on Enverus Top Public Operators list) is acquiring EnCap Investments’ Grayson Mill Energy for $5 billion in cash and stock.

Enverus Press Release - Canadian oil sands: Back in the limelight
Power and Renewables
ByRob Allerman

As we approach the middle of summer 2024, the California Independent System Operator (CAISO) region is slated for a season of dynamic weather, shifting energy demands and evolving renewable energy contributions.

Enverus News Release - Who’s making the connection in southern Louisiana?
Financial Services Midstream
ByRebekah Mitchell

Learn how Enverus inventory solutions adapt to new extraction technologies and market dynamics to better evaluate and capitalize on remaining hydrocarbon reserves.

Enverus press release - Renewing Alberta’s path for renewables
Power and Renewables
ByCarla Rodriguez

The power trading landscape is rapidly evolving with the significant growth of renewable energy sources such as wind and solar.

Enverus Blog
Power and Renewables
ByManas Trivedi

Northeastern parts of the U.S. faced a major heatwave June 17-21. New England saw record-high temperatures across the region for several days.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert