U.S. Oil Inventories Jump as Cushing Stocks Keep Falling

The American Petroleum Institute estimated a sizeable rise in U.S. crude inventories for the week ending Sept. 11, reporting a gain of 7.14 million barrels after a modest 300,000-barrel decline the prior week. API data show that commercial crude stocks excluding the Strategic Petroleum Reserve have fallen by just over 41 million barrels over the past 22 weeks, while total U.S. crude inventories are still about 10 million barrels higher year-to-date, a gap largely moderated by releases from the SPR.

For the latest reporting week, the SPR saw another withdrawal of 400,000 barrels, bringing the reserve's holdings to 285 million barrels. That level is 446 million barrels below maximum capacity. Industry guidance notes an operational minimum for the SPR in the range of 250–300 million barrels, below which the reserve could face difficulties pumping and processing oil efficiently.

U.S. crude production continued to climb, with weekly output for the period ending Sept. 4 rising to 13.947 million barrels per day from 13.862 million bpd the week before, and up 452,000 bpd versus a year earlier. Oil prices moved higher amid the inventory shifts: at 4:13 p.m. ET on Wednesday Brent was trading at $108.68 a barrel, up 2.84% on the day, while West Texas Intermediate stood at $107.38, a 3.70% intraday rise.

Refined-product stocks showed mixed changes. Gasoline inventories increased by 1.46 million barrels in the week ending Sept. 11 after falling 1.9 million barrels the week before; gasoline remained about 5% below the five-year average for this time of year, per the latest EIA data. Distillate stocks rose by 1.61 million barrels following a 2.0 million-barrel gain the prior week and were roughly 13% below the five-year average heading into the reporting period. Meanwhile, inventories at Cushing, the delivery hub for the WTI futures contract, fell by 246,000 barrels in the reporting period after a 300,000-barrel decline the week earlier.