Crude Oil Inventories Drop Sharply

On September 5, 2024, the U.S. Energy Information Administration (EIA) released its latest Weekly Petroleum Status Report. The report showed that U.S. crude oil inventories fell by 6.9 million barrels as of last week, far exceeding market expectations of a 1.1 million barrel drop.

As for gasoline inventories, they actually increased by 800,000 barrels, despite analysts' expectations for a 1.1 million barrel decrease. Meanwhile, distillate fuel inventories fell by 400,000 barrels from the previous week.

The Strategic Petroleum Reserve (SPR) increased to 379.7 million barrels from 377.9 million barrels, indicating that the U.S. continues to purchase oil to replenish the strategic reserve. Domestic crude oil production remained unchanged at 13.3 million barrels per day (bpd).

WTI & Brent Crude Oil Price Dynamics

Following the release of the EIA report, WTI crude oil prices retreated from the day's highs and are currently trading near $70.20. Brent crude oil prices, on the other hand, are oscillating around $73.70. It is worth noting that the news of OPEC+ postponing its plan to increase production has provided support to oil prices.

EIA natural gas report delivers strong performance

On the day, traders also focused on the Weekly Natural Gas Inventories Report released by the EIA. The report showed that working gas inventories increased by 13 billion cubic feet (Bcf) last week, significantly lower than the 28 Bcf increase expected by the market.

Natural gas prices tested new highs on the positive EIA report. Technically, natural gas is trying to break through the strong resistance level of $2.25 to $2.30.