Advertisement Advertisement Published : May 17, 2023, 14:49 UTC • 1 min read Oil markets moved lower after the release of the EI...
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Published: May 17, 2023, 14:49 UTC•1min read
Oil markets moved lower after the release of the EIA data as analysts expected that crude inventories would decline by 0.9 million barrels.
Key Insights
- Crude inventories increased by 5 million barrels, compared to analyst consensus of -0.9 million barrels.
- Domestic oil production declined from 12.3 million bpd to 12.2 million bpd.
- Strategic Petroleum Reserve decreased from 362 million barrels to 359.6 million barrels.
On May 17, EIA released its Weekly Petroleum Status Report, which indicated that crude inventories increased by 5 million barrels from the previous week. At current levels, crude inventories are slightly below the five-year average for this time of the year.
Crude oil imports, which increased by 1.3 million bpd from the previous week, served as an important catalyst for the increase in crude inventories. Total motor gasoline inventories declined by 1.4 million barrels, while distillate fuel inventories grew by 0.1 million barrels.
U.S. domestic oil production declined from 12.3 million bpd to 12.2 million bpd. Oil producers are not ready to boost production at current price levels.
Interestingly, the U.S. continued to sell oil from the Strategic Petroleum Reserve. SPR declined to multi-decade lows at 359.6 million barrels. It should be noted that the Department of Energy has recently announced that it would purchase up to 3 million barrels of oil for SPR, so the bottom in reserves might have been already reached.
Oil markets moved lower after the release of the EIA report as traders focused on rising crude inventories. The bullish catalysts like declining domestic production and falling SPR levels did not provide enough support to oil markets. WTI oil pulled back towards the $71 level, while Brent oil settled close to the $75 level.
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