API Oil Stocks Decline for the Fourth Consecutive Week

Forex - The American Petroleum Institute (API) reported a decline in crude oil inventories for the fourth consecutive week, exceeding analysts' expectations.

According to the API, crude stockpiles decreased by 1.44 million barrels in the previous week and fell by an additional 4.02 million barrels for the week ending January 3. The market had anticipated a limited drop of around 250,000 barrels in stockpiles.

API data indicated that crude oil inventories have declined by more than 12 million barrels in 2024. The data released by the Department of Energy (DoE) indicated a 200,000-barrel increase in strategic petroleum reserve (SPR) crude oil stocks, reaching 393.8 million barrels. Although SPR stocks remain about 48 million barrels above their lowest levels during the summer months, they are down 240 million barrels since President Biden took office.

API gasoline inventories increased for the second consecutive week. Stocks rose by 2.2 million barrels in the previous week and climbed another 7.33 million barrels last week. This marked the highest weekly increase seen in 2024. Gasoline inventories are slightly above the five-year average for this time of year.

There was also an upward movement in distillate product stocks for the second consecutive week. Stocks increased by 5.7 million barrels previously, followed by a further rise of 3.2 million barrels last week. Despite the increase, distillate stocks remain approximately 6% below the five-year average.

Crude oil inventories in Cushing, Oklahoma, the world's largest oil storage hub and a key junction for pipelines in the U.S., turned downward after three weeks of increases. After a limited rise of 305,000 barrels previously, Cushing crude oil stocks decreased by 3.12 million barrels last week.

The U.S. Department of Energy (DoE) is expected to report a decline in oil inventories today, with a survey conducted by WSJ indicating that analysts forecast an additional drop of 1.0 million barrels for the week ending January 3, following a decrease of 1.2 million barrels in the previous week.

In the WSJ survey, gasoline stock estimates suggested an increase of 0.5 million barrels, while distillate product stocks were estimated to rise by 0.2 million barrels. The survey also indicated that the capacity utilization rate reported by the DoE is expected to decrease from 92.7% to 92.4%.

DoE stock data will be released at 18:30 TSI.