Crude oil inventories fell 4.9 million barrels in the January 5 week to 419.5 million, posting the eighth consecutive weekly drawdown and widening the year-on-year decline by 1.8 percentage points to 13.2 percent. But gasoline inventories rose again and were up 4.1 million barrels to 237.3 million, 1.3 percent below last year's level, and distillates rose 4.3 million barrels to 143.1 million, 15.9 percent below last year at this time. However, sizeable declines were posted in the week among other products, with propane and propylene inventories down 6.3 million barrels to 61.7 million, 22.6 percent below last year, and other oils down 4.2 million barrels to 263.0 million, 2.2 percent above last year's level. Total commercial stocks were thus down 5.5 million barrels in the week to 1,219.7 million barrels, 8.7 percent below last year at this time. The drawdown in crude oil reported by the EIA today was less than half of the 11.2 million barrel draw reported yesterday by the American Petroleum Institute (API), a private industry group. After rising to the highest level since 2014 on the back of the more bullish API report, WTI crude oil prices retreated by about 20 cents to around $63.10 per barrel immediately following the EIA release.
Refineries throttled back in the week to operate at 95.3 percent of their operable capacity, down 1.4 percentage points from the prior week. Gasoline production decreased, averaging 9.5 million barrels per day, as did the production of distillates, averaging 5.3 million barrels per day.
Crude oil imports fell by 308,000 barrels per day from the previous week to a daily average of 7.7 million barrels. Over the last four weeks, crude oil imports averaged 7.9 million barrels per day, 4.3 percent below the level in the same period last year.
The demand side remained steady and strong, with total products supplied over the last four weeks averaging 20.6 million barrels per day, up 5.6 percent from the same period last year. Gasoline product supplied averaged 9.1 million barrels per day, 2.5 percent above the level a year ago, while distillate supplied averaged 3.9 million barrels per day, up 6.8 percent from the same period last year.
Dampened imports and strong domestic demand have more than offset the impact of increased domestic production and brought bloated inventories down to the middle of the average range for this time of year. But with crude oil prices above $63 per barrel and domestic shale oil breakeven costs far below that price, supply from the nearly inevitable new domestic production may swell inventories again during the new year.