EIA: US crude inventories tighten further as exports remain healthy and refiners sustain near-95% utilisation

US commercial crude oil inventories fell by 8.0 million barrels in the week ended 29 May, nearly double market expectations for a 4.0 million-barrel draw, as strong export demand and elevated refinery utilisation tightened domestic supplies despite a sharp increase in imports. The decline came as buyers in Asia and Europe continued seeking alternatives to Middle Eastern crude and refined products disrupted by the ongoing Iran war, now entering its fourth month.

Crude stocks fell to 433.7 million barrels, around 3% below the five-year seasonal average, while inventories along the US Gulf Coast dropped by 6.7 million barrels. Refiners operated at 94.7% of capacity, among the highest rates this year, while domestic crude production held steady at 13.7 million bpd.

Supporting the draw, US crude exports climbed to 5.9 million bpd, the second-highest weekly level on record. Net crude imports fell by 249,000 bpd even as gross imports rose by 1.2 million bpd to 6.4 million bpd, highlighting the strength of outbound flows as international buyers increasingly turned to US barrels.

The draw was even more notable given continued releases from the Strategic Petroleum Reserve. SPR inventories fell by a further 8 million barrels to their lowest level since January 2024 as part of an ongoing programme aimed at easing elevated oil prices. Combined commercial and SPR crude inventories therefore declined by roughly 16 million barrels during the week. Since the start of the US-Israeli conflict with Iran on 28 February, total US crude inventories have fallen by nearly 64 million barrels.

The products complex painted a less supportive picture. Total gasoline inventories rose by 3.4 million barrels to 215 million barrels, defying expectations for a 500,000-barrel draw, while distillate stocks increased by 1.5 million barrels to 102.3 million barrels against forecasts for a 300,000-barrel decline. The builds reflected strong refinery output and softer implied fuel consumption following the Memorial Day holiday period.

Demand indicators also weakened on a weekly basis, with total products supplied, a proxy for fuel consumption, falling by 610,000 bpd to 20.33 million bpd. However, broader demand trends remained constructive, with four-week average product supplied at 20.4 million bpd, up 3.0% from the same period last year.

Written by: Farid Muzaffar