Increase In Us Crude Stockpiles

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Increase In Us Crude Stockpiles

EIA - Addition Of 4M Barrels To US Crude Oil Stockpiles

According to the data from EIA, 4 mn barrels were added to the crude oil stockpiles of the USA last week. In the past 5 weeks, that's the first-ever increase and tells us that the stockpiles of crude oil have started to go up.

This build-up of the crude oil stockpiles is also an indication that the demand for lower has become low after the summer season. During the peak summer season, the energy demand rose up as more US households used air conditioning systems to beat the heat.

Energy Demand Falls In The USA

Overall, around 9.955 mn barrels were added to the stockpiles. According to forecasts, a 2.481 million drawdown in the stockpiles was expected, but the actual result showed an increase. This suggests that the energy demand is more weak than initially expected by the experts.

The gasoline inventory also jumped higher by 5.561 million, according to the EIA. As per the forecast, a decline of around 0.85 million barrels was expected. In the USA, the #1 product for file is gasoline, which highlights the importance of these numbers.

Similarly, the stockpiles of the distillate products also jumped by 3.931 million barrels while the forecast was for 1.4 million. In the USA, the distillate products are refined into jet fuel, train fuel, diesel, heating oil, etc.

The bigger picture that can be carved out of this EIA report is a collapse in the fuel demand. According to the EIA, the refiners in the USA continue to enjoy optimum levels of inventory. They also added that the oil firms are now refining less amount of crude oil due to a drop in the energy demand.

Last week's data showed that the operational capacity of refineries in the USA was 93.7%. In other words, there's still ample space to ramp up the production if the need arises.

It is still a few more months before the winter season starts, which means the energy demand will remain subdued till then!

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