Commercial crude stockpiles took off last week in the United States, according to figures released Wednesday by the US Energy Information Agency (EIA), marking their eighth consecutive weekly gain, amid requested weakening. These commercial stocks increased by 16.3 million barrels, eight times the variation anticipated by analysts (+2 million), according to a consensus established by the Bloomberg agency. They are now at their highest level since early June 2021.
The market took this surprise figure badly and prices accelerated their fall after the publication. At around 16:00 GMT, a barrel of American West Texas Intermediate (WTI) for March delivery was down 1.44% at $77.92.
Strategic reserves soon drilled at 26 million barrels
Since mid-December, the inventory of crude oil held by private interests in the United States has increased by 53 million barrels, in the height of the winter season, which usually marks a drop in these stocks. This new jump in commercial reserves is partly explained by the still high level of net imports (difference between imports and exports), which reached 3 million barrels per day during the week ending February 10. During the week, the volumes of black gold available in the US market increased by 21 million barrels due to imports.
Since early January, US Strategic Crude Reserves (SPRs) have been flat. The government of President Joe Biden announced Monday that it will withdraw 26 million barrels from the SPR in the coming weeks to comply with a law passed by the US Congress in 2015.
Falls in demand and refinery activity
Another factor justifying the increase in commercial inventories is the slowdown in refinery activity, whose utilization rate stood at 86.5%, compared to 87.9% the previous week. The month of February traditionally corresponds to a maintenance period for refineries, which mechanically reduces their production capacities.
Last element of explanation, the drop in demand, already weakened for several months. It contracted 6% in a week. Averaged over four weeks, data favored by analysts, it is now 10% lower than its 2022 level at the same time. Last week’s decline was due in particular to the collapse in demand for propane (-44% in one week) and the slowdown in kerosene (-6%), despite the restoration of air transport. Regarding production, it remained stable at 12.3 million barrels per day.
Source: BFM TV
