US Crude Oil Inventories See Surprise 10 Million Barrel Spike

The American Petroleum Institute (API) estimated that crude oil inventories in the United States rose by a staggering 10.263 million barrels in the week ending March 27. In the week prior, US crude oil inventories rose by 2.3 million barrels. Analysts had expected a draw of 1.3 million barrels in the current reporting period.

Inventories in the US Strategic Petroleum Reserve (SPR) drew down for the first week in many, sinking by 300,000 barrels to 415.1 million barrels as of the week ending March 27. This is 310.4 million barrels shy of maximum capacity.

US production fell for the fifth week in a row, this time by 11,000 bpd, sinking to an average of 13.657 million bpd for week ending March 20, according to the latest EIA data. This is 83,000 bpd more than this same time last year.

At 3:48 pm ET, Brent crude was trading down on the day at $104.40 (-2.79%). Brent is up roughly $0.70 per barrel, up from this time last week with continued disruption of tanker traffic through the Strait of Hormuz, as well as oil production losses in Iraq, UAE, and Saudi Arabia. WTI was also trading down on the day, by $0.92 per barrel (-0.89%) at $102, although up week over week.

Gasoline inventories fell this week by 3.209 million barrels in the week ending March 27. In the week prior, gasoline inventories rose by 500,000 barrels. As of last week, gasoline inventories were 3% above the five-year average for this time of year, according to the latest EIA data.

Distillate inventories also fell, by 1.04 million barrels, after gaining 1.4 million barrels in the week prior. Distillate inventories were 0.4% below the five-year average as of the week ending March 20, the latest EIA data shows.

Cushing inventory—the inventory kept at the delivery hub for the WTI Crude futures contract—added 784,000 barrels, after adding a hefty 4 million barrels in the week prior.

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