Ultimately, the SPR release may be a considerable weight around the neck of current spot prices but it’s inherently temporary and will fall away in November, reducing spot market supply by the equivalent of Oman’s entire oil production base overnight-surely a price-positive development. Still, the volume of crude in the reserve does matter, of course, for assessing the potential future impact of the SPR on the broader market in fact, its knowably finite character makes it decidedly different from other flexible sources of supply. While the SPR may be a stock of crude, it doesn’t behave like inventory the “strategic” aspect of the reserves means that decisions to buy and sell crude are decoupled from spot market machinations and typical market incentives provided by the futures curve. Specifically, there is an important, albeit persnickety, definitional issue at hand: the barrels released from the SPR represent additional supply, not simply a drawdown in inventories -a critical distinction for properly understanding the current market.
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crude imports (USOICI=ECI) rose by 1.69 million bpd, EIA said.Never before has the SPR played such a material role in oil markets, and the uniqueness of the situation leaves many of us unfamiliar with how to think about the knock-on effects of the SPR release. gasoline stocks (USOILG=ECI) fell by 800,000 barrels in the week to 218.2 million barrels, the EIA said, compared with analysts' expectations for a 1.1 million-barrel rise.ĭistillate stockpiles (USOILD=ECI), which include diesel and heating oil, rose by 2.6 million barrels in the week to 109 million barrels, more than double forecasts for a 1.1 million-barrel rise, the EIA data showed. West Texas Intermediate crude futures (WTI) rose immediately following the data release, along with gasoline and distillate futures.Ĭrude stocks at the Cushing, Oklahoma, delivery hub for WTI (USOICC=ECI) fell by 1.6 million barrels last week, EIA said. "The commercial crude build is in part due to inventory shifts from the drawdowns in the Strategic Petroleum Reserve, but those inventories continue to move aggressively lower and that's the expectation for the next several months," said Tony Headrick, energy market analyst at CHS Hedging.īrent and U.S. On the East Coast, utilization rose to 99.2%, its highest since November 2017. Refinery crude runs (USOICR=ECI) rose by 354,000 barrels per day to 16.4 million bpd, their highest since January 2020, and utilization rates (USOIRU=ECI) jumped by 1.6 percentage points to 94.2% of capacity, their highest since December 2019, the EIA said. SPR crude stocks fell by a record 7.3 million barrels to 519.3 million, their lowest since March 1987. commercial crude oil inventories rose unexpectedly last week, while crude in the Strategic Petroleum Reserve fell by a record amount as refiners ramped up production to pre-pandemic levels, the Energy Information Administration said on Wednesday.Ĭrude inventories (USOILC=ECI) rose by 2 million barrels in the week to June 3 to 416.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.9 million-barrel drop.
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