Crude oil prices slipped today after the U.S. Energy Information Administration reported crude oil inventories had shed 1.7 million barrels in the week to October 14.
This compared with an inventory build of 9.9 million barrels for the previous week and an API estimate of declines in both crude and fuels for the week to October 14.
In gasoline stocks, the EIA reported a draw of 100,000 barrels, which compared with a build of 2 million barrels for the previous week.
Gasoline production averaged 9.4 million bpd in the week to October 14, which compared with 9.2 million bpd during the previous week.
In distillate fuels, the EIA reported an inventory increase of 100,000 barrels for last week. This compared with two consecutive weekly draws of a combined 8.3 million barrels.
These weekly draws are contributing to the depletion of U.S. distillate stocks, which is fueling fears of a diesel shortage. Diesel supply has been tightening for months now, as the global economy emerged from pandemic restrictions with less refining capacity but strong fuel demand.
As a result, warnings are multiplying that we may be on the cusp of a diesel shortage that could prove to be even more dangerous than a crude oil shortage given diesel’s use in the transportation and agricultural industry, to mention just a couple.
Middle distillate production in the U.S. last week went up to 5 million barrels. This compared with 4.9 million bpd for the previous week.
Meanwhile, President Biden has announced the release of another 15 million barrels of crude from the strategic petroleum reserve, which would complete the 180-million-barrel release program announced earlier this year to counter soaring prices at the pump.
The White House also said in a fact sheet it would start replenishing the SPR when oil prices fall to between $67 and $72 per barrel, noting this would ensure long-term demand for oil and stimulate local production. NB: Irina Slav wrote this article for Oilprice.com
