HomeFutures and CommoditiesUS crude inventories decrease by 2.7M barrels, Cushing storage hub experiences growth,...

US crude inventories decrease by 2.7M barrels, Cushing storage hub experiences growth, maintaining its distinctiveness.

US Crude Stocks Decline, Cushing Storage Hub Sees Build – API

US Crude Stockpiles Decline, Fuel Inventories Show Drop

Investing.com – US crude stockpiles possibly fell as much as 2.7 million barrels last week, according to the American Petroleum Institute (API). This marks a second consecutive week of declines, indicating that strong exports are influencing inventories. Gasoline and distillate inventories also saw declines, as reported in the API’s weekly inventory report.

Unusual Declines in Fuel Stocks Amid Seasonal Maintenance

Typically, demand for fuels is softer in the United States at this time of year due to fewer families taking road trips with their children back in school. However, with the refinery industry undergoing seasonal maintenance, larger-than-usual declines in fuel stocks are common, with limited replenishments coming in.

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Crude Draw and Cushing Storage Hub Build

The API reported a 2.668 million barrel decline in crude stocks during the week ended Oct. 20. However, the API also noted a 0.513 million barrel build at the Cushing, Oklahoma storage hub, which serves as the delivery point for US West Texas Intermediate crude futures traded on the New York Mercantile Exchange. Cushing storage levels have dropped drastically this year, raising concerns about potential complications in operations at the storage hub.

Decline in Gasoline and Distillate Stocks

The petroleum trade group reported a 4.169 million barrel slide in gasoline inventories and a 2.313 million barrel drop in distillate stocks. In the previous week, gasoline inventories had a 1.578 million barrel deficit, while distillates experienced a 0.612 million barrel drop.

EIA Inventory Data and Expectations

The API data serves as a precursor to the official inventory data from the US Energy Information Administration (EIA), which is due to be released on Wednesday. Analysts expect the EIA to report a 0.55 million barrel drop for last week, adding to the 4.491 million barrel reduction reported during the previous week. Gasoline inventories are expected to show a draw of 0.1 million barrels, while distillates are projected to see a drop of 1 million barrels.

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Overall, the recent decline in US crude stocks, coupled with decreases in gasoline and distillate inventories, suggests a potential influence of strong exports on inventories. However, concerns remain regarding the low levels of storage at the Cushing hub and the impact it may have on operations. The EIA’s upcoming inventory report will provide further insights into the state of the US petroleum market.

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