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US crude balances continued to loosen in the week ending 10 April, as a substantial inventory build pushed stockpiles to a near three-year high, overshadowing a slight dip in domestic production and a significant increase in exports.

Commercial crude inventories (excluding the Strategic Petroleum Reserve) increased by 5.8 million barrels to 467.4 million barrels, the highest level since June 2023. The build highlights a persistent supply overhang, with crude inflows outpacing the absorption capacity of domestic refiners and export markets, though overall stocks remain in line with the five-year seasonal average.

Domestic crude production edged down nominally by 6,000 barrels per day (bpd) to 13.68 million bpd. However, this minor contraction was offset by trade flows; while imports held relatively steady at 6.47 million bpd, exports surged by 1.15 million bpd to average 4.47 million bpd.

Refinery activity provided some structural support but failed to prevent the inventory build. Crude inputs rose by 82,000 bpd to 16.67 million bpd, keeping the utilisation rate steady at 92.9% of operable capacity.

Refined product inventories displayed mixed signals. Motor gasoline stocks fell by 1.6 million barrels to 237.7 million barrels, despite production averaging 9.88 million bpd, leaving them about 3% above the five-year average. Conversely, distillate fuel inventories increased by 1.4 million barrels to 121.3 million barrels, resting roughly 1% below seasonal norms as production fell by 133,000 bpd to 4.88 million bpd.

The data indicates a bifurcated market. The significant crude build exerts near-term downward pressure on pricing. However, steady gasoline draws and an increase in overall product supplied—averaging 20.67 million bpd over the last four weeks, up 1.3% year-on-year—suggest resilient consumer demand that could gradually tighten balances as the summer driving season approaches.

Written by: Aiman Haikal