US Oil Inventories Are Falling As Demand Rises And Production Declines, EIA Says


U.S. crude inventories fell to their lowest level in 2021 last week after production fell and demand for petroleum products continued to rise – another among a series of indicators pointing to a tightening oil market .

National stocks of commercial crude during the week ended June 18, excluding those of the strategic oil reserve, were down 7.6 million barrels from the previous week, the March said on Wednesday. United States Energy Information Administration (EIA). At 459.1 million barrels, inventories were 6% below the five-year average.

Production last week fell by 100,000 barrels and averaged 11.1 million barrels per day, according to the EIA Weekly State of Oil Report shown. It held close to the 2021 high of 11.2 million b / d, but remained well below the 2020 peak of 13.1 million b / d reached in March. US shale drillers are under pressure from investors to control their spending.

US crude imports averaged 6.9 million bpd last week, up 197,000 bpd from the previous week. Over the past four weeks, however, imports have averaged 6.5 million barrels per day, down 1% from the previous year.

Demand, meanwhile, climbed 1% week / week after reaching 16% in the week ended June 11.

Over the past four weeks, demand has averaged 19.5 million barrels per day, up 15% from the same period in 2020, the EIA said. During the same period, motor gasoline consumption rose 14% and demand for jet fuel soared 98%, a 15-month high. Demand for distilled fuel jumped 19%.

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The latest results showed a strong and continued recovery that took hold in the spring as coronavirus vaccination programs proved effective, U.S. economic activity picked up and travel steadily increased.

As US production stagnates and global demand rises alongside US consumption, analysts at Rystad Energy said on Wednesday that the Organization of the Petroleum Exporting Countries and its petroleum-producing allies, aka OPEC-plus, could rise further. production in August to correct imbalances and take advantage of rising prices. Brent crude, the international benchmark, hit $ 75 / b this week for the first time since before the pandemic.

OPEC-plus is currently adding more than 2 million barrels per day to the global market, a process that started in May and is expected to continue until July. Goldman Sachs analysts, however, estimated that global demand increased by 2 million bpd over the past month, more than offsetting the cartel’s increases to date.

The Saudi-led cartel is meeting next week to decide next steps for production. Early analyst estimates revolve around an additional monthly increase of about 500,000 barrels in August and potentially in the months following, according to Robert Yawger, director of energy futures at Mizuho Securities USA LLC. OPEC-plus policy makers are expected to meet on July 1.

OPEC, however, expects global oil demand to increase by around 6 million barrels per day in the second half of this year.

“Even with increases in supply on the horizon, it will be difficult to combat improving demand,” analysts at Raymond James & Associates Inc. said Wednesday.

OPEC-plus cut production by 9.7 million bpd at the start of last year after the pandemic gripped the world, froze travel and decimated demand. Cartel additions since oil demand began to pick up last summer are expected to total around 4 million barrels per day by the end of July.


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