Recent figures released by the U.S. Energy Information Administration (EIA) reveal an increase in U.S. crude oil inventories of 3.6 million barrels for the week ending June 21. This increase contrasts sharply with analysts’ forecasts, who anticipated a drop of 2.8 million barrels, according to a consensus from the Bloomberg agency.
The EIA study found that the lag was partly due to a reduction in activity at U.S. refineries, which operated at 92.2% of capacity last week, down from 93.5% previously. This was the third consecutive decline in their activity, reflecting a worrying trend for the sector.
Refinery slowdown and weather conditions
According to Matt Smith, analyst at Kpler, the decrease in oil exports, which fell 11% in one week, is attributable to unfavorable weather conditions in the Gulf of Mexico. The first tropical storm of the season, named Alberto, hit part of Texas, disrupting maritime traffic.
At the same time, crude imports also fell by 6%, despite an increase in oil imports a few weeks ago, partially offsetting the decline in exports. However, this dynamic contributed to the accumulation of crude oil inventories on American soil.
Reduction in domestic demand
The EIA report also indicates a contraction in the volumes of refined products delivered to the American market, with a drop of 1.8%. This decline is an implicit indicator of demand for petroleum products in the United States. Gasoline volumes particularly suffered, recording a drop of 4.4% in one week, falling below the symbolic threshold of nine million barrels per day.
The decrease in volumes also affected kerosene and distilled products, including diesel, which fell by 1.2% and 11.1% respectively. Gasoline stocks, meanwhile, increased by 2.7 million barrels, compared to a reduction forecast by analysts of 1.5 million barrels.
Market Outlook and Impact
Despite this increase in stocks, Matt Smith forecasts a reduction in gasoline reserves for the coming week, as the long weekend of July 4, a national holiday in the United States, approaches, which is generally marked by an increase in fuel consumption.
Regarding crude oil production, it remained stable at 13.2 million barrels per day. However, the EIA’s publication of these figures had an immediate impact on oil prices, which fell after initially rising. At 3:05 p.m. GMT, a barrel of West Texas Intermediate (WTI) for delivery in August lost 0.37%, settling at $80.53.
This situation highlights the challenges facing the US oil market, between fluctuations in demand, disruptive weather conditions and adjustments in refining activities. The trend in the coming weeks will be crucial in determining whether this increase in inventories continues or whether a recovery in demand will rebalance the market.
