Key points:

• Crude oil inventories increased by 3.6 million barrels, exceeding traders' expectations for a decline.
• The average daily processing volume of refineries is 16.5 million barrels, and gasoline production has decreased.
• US crude oil imports decreased by 443000 barrels per day compared to last week.

Commercial oil inventory

The latest report released by the US Energy Information Agency (EIA) shows that as of the week ending June 21, 2024, US commercial crude oil inventories (excluding strategic oil reserves) increased by 3.6 million barrels, totaling 460.7 million barrels. This inventory level is about 2% lower than the average level of the same period in five years. The total gasoline inventory increased by 2.7 million barrels, consistent with the five-year average level.

However, distillate fuel inventories decreased by 400000 barrels, about 9% lower than the five-year average level. Propane/propylene inventory increased by 2.1 million barrels, 11% higher than the five-year average level.

Overall, the total commercial oil inventory increased by 8.2 million barrels last week. The trader had originally expected a decrease of 2.6 million barrels in inventory, so the actual increase in inventory surprised the market.

Crude oil refinery input

As of the week ending June 21, 2024, the average daily processing volume of US crude oil refineries was 16.5 million barrels, a decrease of 234000 barrels from the previous week. The operating rate of the refinery is 92.2%. Gasoline production has decreased, averaging 9.9 million barrels per day, while distillate fuel production has increased, averaging 4.9 million barrels per day.

Imports of crude oil and products

As of the week ending June 21, 2024, the average daily crude oil imports from the United States were 6.6 million barrels, a decrease of 443,000 barrels from the previous week. However, the average daily crude oil imports over the past four weeks were 7.3 million barrels, an increase of 13.7% compared to the same period last year. The average daily import volume of gasoline, including finished gasoline and mixed components, is 762,000 barrels. The average daily import volume of distillate fuel is 133,000 barrels.

Product Supply

In the past four weeks, the average daily supply of total products was 20.4 million barrels, an increase of 0.8% compared to the same period last year. The daily average supply of gasoline products is 9.1 million barrels, a decrease of 2.0% compared to last year. The daily average supply of distillate fuel products is 3.6 million barrels, a decrease of 1.0%. The supply of aviation fuel products has slightly increased by 0.1% compared to the same period last year.

Market Outlook

The latest data from EIA indicates that the outlook for the crude oil market is unclear. The increase in commercial crude oil inventories, coupled with a decrease in refinery processing and gasoline production, may exert downward pressure on crude oil prices. However, the increase in distillate fuel production and stable product supply indicators provide some bullish factors. Overall, market sentiment appears cautious and bearish, with increased inventory and reduced demand potentially putting pressure on prices in the short term.