U.S. Crude Oil Inventories Decline for Third Consecutive Week

For the week ending May 8, U.S. crude oil inventories decreased by 4.3 million barrels, exceeding analyst expectations of a 2.3 million barrel draw.

The U.S. Energy Information Administration (EIA) estimates that U.S. crude oil production averaged 13.7 million barrels per day, an increase of 137,000 barrels per day from the previous week.

**Key Points** * U.S. crude oil inventories fell for the third consecutive week through May 8, dropping by 4.3 million barrels to a total of 452.9 million barrels. * The decline was driven by increased crude exports and higher refinery utilization rates, according to EIA data released on Wednesday. * Commercial crude inventories, excluding the Strategic Petroleum Reserve (SPR), fell by 4.3 million barrels to 452.9 million barrels. This level is about 0.3% below the five-year average for this time of year. Analysts had expected a smaller draw of 2.3 million barrels. * SPR stocks decreased by 8.6 million barrels to 384.1 million barrels, influenced by emergency releases by the U.S. Department of Energy. Crude stocks at the Cushing, Oklahoma delivery hub for NYMEX futures fell by 1.7 million barrels to 27.4 million barrels.

**Production and Trade** * U.S. crude oil production is estimated at 13.7 million barrels per day, up 137,000 barrels per day from the prior week. * Crude oil imports averaged 5.9 million barrels per day, an increase of 424,000 barrels per day from the previous week. * Crude oil exports surged by 742,000 barrels per day to 5.5 million barrels per day.

**Refining Activity** * Refinery capacity utilization rose by 1.6 percentage points to 91.7%. * Refinery crude inputs increased by 369,000 barrels per day to 16.4 million barrels per day. Analysts had expected a smaller rise of only 0.5 percentage points in utilization.

**Product Inventories** * **Gasoline:** Inventories fell by 4.1 million barrels to 215.7 million barrels, marking the 13th consecutive weekly decline. This level is 5% below the five-year average. Gasoline product supplied, a proxy for demand, decreased by 59,000 barrels per day to just under 8.8 million barrels per day. * **Distillate Fuel Oil:** Inventories saw a modest build of 190,000 barrels to 102.5 million barrels, which is 9% below the five-year average.

Market expectations prior to the report were for a gasoline draw of 2.6 million barrels and a distillate draw of 2.1 million barrels.