EIA: US crude stocks post consecutive sharp draws as refinery runs near capacity

US commercial crude inventories fell by 7.2 million barrels in the week ended June 5 to 426.5 million barrels, the Energy Information Administration reported Wednesday, well beyond analyst expectations of a 4 million-barrel draw and leaving stocks roughly 5% below the five-year seasonal average.

Refinery activity continued to drive the drawdown. Crude inputs averaged 17.0 million barrels per day, up 80,000 bpd from the prior week, with utilisation holding at 95.3% of operable capacity. At that run rate, the throughput pressure on crude stocks is unlikely to ease in the near term.

Crude imports offered limited offset. Arrivals averaged 5.9 million bpd last week, down 500,000 bpd from the previous week, and over the past four weeks imports have run about 5.8% below year-ago levels. On the export side, outflows fell by 1.03 million bpd to 4.84 million bpd, a decline that analysts attributed in part to tighter domestic availability as refiners absorb available barrels. Domestic production figures were not included in this week's EIA release.

Domestic crude output held at 13.4 million bpd, unchanged from the prior week, according to EIA data. Total motor gasoline inventories edged up 200,000 barrels to 215.1 million barrels, against analyst expectations of a 471,000-barrel draw, though stocks remain 6% below the five-year average. Gasoline production averaged 9.7 million bpd last week. Four-week implied demand for motor gasoline averaged 8.8 million bpd, down 0.5% from the same period last year, with analysts noting consumer sensitivity to elevated pump prices.

SPR hits lowest level since August 2023

Since the Iran war began on February 28, combined commercial and strategic crude stocks have fallen by 79 million barrels. SPR inventories are now at their lowest point since August 2023, as the U.S. has drawn on reserves to help fill supply gaps created by the effective closure of the Strait of Hormuz. The U.S. remains the world's largest crude producer and has absorbed a significant share of the displaced barrels, but the cumulative SPR decline underscores the scale of the supply disruption now entering its fourth month.

Written by: Farid Muzaffar