By PortalPortuario Editorial Team/ Reuters Agency
U.S. crude oil inventories declined by 1.6 million barrels in the week ending September 13, bringing the total to 417.5 million barrels, the lowest level in a year, according to the Energy Information Administration (EIA).
This drop was significantly higher than analysts had anticipated, with a Reuters poll forecasting a reduction of only 500,000 barrels.
Moreover, excluding the Strategic Petroleum Reserve, stockpiles reached their lowest point since September 2023, and inventories in the Midwest fell to their lowest since December 2014.
At the crude oil futures delivery hub in Cushing, Oklahoma, stocks decreased by 2 million barrels to 22.7 million, the lowest level in nearly a year. According to Matt Smith, an analyst at ship tracking firm Kpler, this downward trend has been consistent over 10 of the last 11 weeks.
In contrast, Brent futures reduced their losses and were trading at USD 73.53 per barrel, while West Texas Intermediate was priced at USD 71.10 per barrel. Both contracts had seen sharper declines earlier in the session.
Josh Young, chief investment officer at Bison Interests, voiced concerns that reserves at Cushing are “falling to worryingly low levels, near the bottom of the tanks,” which could create significant challenges for market stability.
Finally, net imports of the fuel into North America decreased by 1.8 million barrels per day, as port activity along the United States Gulf coast slowed due to Hurricane Francine.
By PortalPortuario Editorial Team/ Reuters Agency
U.S. crude oil inventories fell by 1.6 million barrels in the week ending September 13 to 417.5 million barrels, marking the lowest level in a year, according to the U.S. Energy Information Administration (EIA). This decline was significantly above analysts’ expectations, which had forecast a reduction of just 500,000 barrels.
Current State of U.S. Crude Oil Reserves
Excluding the Strategic Petroleum Reserve, U.S. stocks dropped to their lowest level since September 2023. Additionally, inventories in the Midwest have reached their lowest levels since December 2014.
Regional Inventory Declines
At the Cushing, Oklahoma crude oil futures delivery center, stocks declined by 2 million barrels to 22.7 million, which is their lowest level in nearly a year. Matt Smith, an analyst at ship tracking firm Kpler, noted that this decline has been consistent over 10 of the last 11 weeks.
Market Implications and Price Trends
Despite the drop in inventories, Brent crude futures saw a slight reduction in losses, trading at USD 73.53 per barrel, while West Texas Intermediate was at USD 71.10 per barrel. Both contracts had experienced sharper declines during trading sessions, showing volatility in response to inventory metrics.
Expert Analysis on Market Stability
Josh Young, chief investment officer at Bison Interests, has expressed concerns about the dwindling reserves at Cushing, describing them as “falling to worryingly low levels, near the bottom of the tanks.” This scenario could pose significant challenges to market stability, prompting discussions among traders about future price fluctuations.
Decreasing Net Fuel Imports
Net imports of crude oil into the United States fell by 1.8 million barrels per day, partly due to a slowdown in port activity along the United States Gulf Coast caused by Hurricane Francine.
Impact of Natural Disasters on Oil Supply
Natural disasters like hurricanes can disrupt oil supply chains significantly, leading to immediate impacts on prices and availability. As supply diminishes due to adverse weather conditions, market dynamics shift, often resulting in price spikes and increased volatility.
Summary of Key Statistics
| Metric | Previous Week | Current Week | Change |
|---|---|---|---|
| Crude Oil Inventories (Million Barrels) | 419.1 | 417.5 | -1.6 |
| Cushing Stocks (Million Barrels) | 24.7 | 22.7 | -2.0 |
| Net Fuel Imports (Million Barrels per Day) | 3.1 | 1.3 | -1.8 |
Future Outlook and Trends
The decline in inventories and net imports suggests tightening supply conditions. Market analysts predict several outcomes depending on the recovery of crude production and the impact of seasonal demand fluctuations.
Considerations for Investors
Investors should be cautious in this volatile environment. Factors such as geopolitical tensions, weather patterns, and strategic reserve decisions will continue to influence market conditions. Keeping an eye on EIA reports and understanding the intricate relationship between supply and demand will be key to making informed decisions.
*Source: U.S. Energy Information Administration (EIA), Reuters
