U.S. Weekly EIA Crude Oil Stocks Change Actual -3859, Previous 7070.

U.S. Weekly EIA Crude Oil Stocks Change Actual -3859, Previous 7070.

U.S. crude oil inventories fell last week, reflecting a significant drop in commercial stocks and a drawdown from the Strategic Petroleum Reserve (SPR). The Energy Information Administration (EIA) reported that commercial crude oil stocks excluding the SPR decreased by 3.9 million barrels to 422.2 million barrels for the week ending July 11, 2025 [1]. This decline was driven by a rise in exports and a reduction in SPR levels. The SPR saw a decrease of 300,000 barrels to 402.7 million barrels, with the Department of Energy announcing it would release up to 1 million barrels to address crude delivery problems at Exxon Mobil's Baton Rouge refinery [1].

The EIA estimated U.S. crude oil production at 13.38 million barrels per day, down by 10,000 barrels from the previous week. Crude imports rose by 366,000 barrels per day to 6.4 million barrels per day, while exports increased by 761,000 barrels per day to 3.5 million barrels per day [1]. Refinery capacity use fell by 0.8 percentage points to 93.9%, contrary to expectations of a 0.3 percentage point decline [1]. Crude oil input to refineries decreased by 158,000 barrels per day to 16.8 million barrels per day.

Gasoline inventories rose by 3.4 million barrels to 232.9 million barrels, slightly above the five-year average. Gasoline demand fell by 670,000 barrels per day to 8.5 million barrels per day [1]. Distillate fuel stocks increased by 4.2 million barrels to 107 million barrels, 21% below the five-year average [1].

The sharp decline in U.S. crude oil inventories has reignited volatility in energy markets. The EIA's report underscores a tightening market, with gasoline and distillate inventories rising marginally. However, the report also highlights sustained demand for diesel and heating oil, suggesting industrial activity remains robust [2]. The data's impact is twofold: short-term price increases and long-term inflation risks [2].

The geopolitical risks surrounding the U.S.-brokered Israel-Iran ceasefire and ongoing supply disruptions in Libya have constrained global production. Additionally, the API's initial erroneous report of a 19.1 million barrel build—later corrected to an 800,000 barrel increase—sparked confusion, amplifying price swings [2]. The backtest analysis highlights sector dynamics, with energy stocks potentially rallying while auto manufacturers face headwinds [2].

Investors are closely monitoring the July 30 Federal Open Market Committee (FOMC) meeting for hints of policy adjustments. The Fed's focus on core inflation (excluding energy) may limit immediate rate hikes, but sustained oil price increases could pressure wage growth or consumer goods prices, forcing the Fed to weigh “second-round” inflation risks [2].

In conclusion, the EIA's report underscores the energy market's fragility, with geopolitical risks and supply-demand imbalances driving uncertainty. Investors must balance near-term energy gains against long-term inflation and consumer spending risks. Staying attuned to upcoming EIA releases, OPEC+ decisions, and the Fed's July 30 policy meeting will be critical for navigating this volatility.

References:
[1] https://www.morningstar.com/news/dow-jones/202507165436/us-crude-oil-inventories-post-weekly-draw
[2] https://www.ainvest.com/news/eia-crude-oil-inventories-plunge-3-86-million-barrels-forecasts-2507/