U.S. crude oil stockpiles have extended their decline to seven consecutive weeks, according to data released by the U.S. Energy Information Administration (EIA) on Wednesday, January 8, 2025. The decline in inventories, coupled with increased refinery capacity use and a decrease in crude oil imports, has contributed to a rise in oil prices. This article will delve into the factors contributing to the decline in U.S. crude oil stockpiles and their impact on oil prices and the broader energy market.



The seventh consecutive weekly decline in U.S. crude oil stockpiles can be attributed to several factors:

1. Decrease in U.S. crude oil production: The EIA estimated U.S. crude oil production at 13.56 million barrels a day, down by 10,000 barrels a day from the week before. This decrease in domestic production contributed to the decline in crude oil stockpiles.
2. Increase in refinery capacity use: Refinery capacity use rose to 93.3% from 92.7%, indicating that refineries were processing more crude oil, which led to a decrease in crude oil inventories.
3. Decrease in crude oil imports: Crude imports fell by 497,000 barrels a day to 6.4 million barrels a day. This decrease in imports contributed to the overall decline in crude oil stockpiles.
4. Increase in crude oil exports: Although exports dropped by 776,000 barrels a day to 3.1 million barrels a day, the decrease was not as significant as the decline in imports, resulting in a net decrease in crude oil stockpiles.

These factors, as reported by the EIA, contributed to the seventh consecutive weekly decline in U.S. crude oil stockpiles. The decline in inventories has led to an increase in oil prices, with West Texas Intermediate (WTI) crude for February delivery settling at $73.32 a barrel on the New York Mercantile Exchange, up by 93 cents or nearly 1.3% (Harrup, 2024).

The decline in crude oil inventories has also affected the broader energy market, particularly gasoline and distillate fuel stocks. On the same week, gasoline inventories jumped by 6.3 million barrels to 237.7 million barrels, and distillate fuel stocks rose by 6.1 million barrels to 128.9 million barrels (Harrup, 2025). These increases in product stocks have been driven by refineries increasing their capacity use, which has led to higher production of gasoline and diesel. This, in turn, has put downward pressure on gasoline and diesel prices, as the increased supply has made these products more affordable for consumers.

Moreover, the U.S. Strategic Petroleum Reserve (SPR) has played a role in managing oil prices and energy market stability. In 2022, the U.S. SPR experienced unprecedentedly large drawdowns, which contributed to gasoline price increases and market panic (Harrup, 2024). However, the SPR's effectiveness as a price control mechanism during crises has been called into question, as it may not have the strategic value previously thought in an extremely tight oil market (Harrup, 2024).

In conclusion, the seventh consecutive weekly decline in U.S. crude oil stockpiles has contributed to an increase in oil prices and has affected the broader energy market, particularly gasoline and distillate fuel stocks. The decline in inventories can be attributed to a decrease in U.S. crude oil production, an increase in refinery capacity use, a decrease in crude oil imports, and an increase in crude oil exports. The U.S. SPR has also played a role in managing oil prices and energy market stability, but its effectiveness during crises has been questioned. As the energy market continues to evolve, investors and consumers alike should keep a close eye on the factors contributing to changes in crude oil stockpiles and their impact on oil prices and the broader energy market.