US crude inventories fell 765,000 barrels last week, API data showed, while gasoline and distillates rose. Focus turns to Wednesday's EIA report for confirmation.
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US crude oil inventories fell by 765,000 barrels last week, the American Petroleum Institute reported late Tuesday. Gasoline and distillate supplies rose.
The draw was smaller than the 1.2-million-barrel decline analysts expected. Gasoline stocks added 1.5 million barrels. Distillate inventories, which include diesel and heating oil, gained 500,000 barrels.
Crude inventories have narrowed from their seasonal surplus. Stocks are now about 2% above the five-year average, versus a 5% surplus a month ago. The shrinking surplus reflects stronger refining activity and steady exports, even as domestic production holds near record levels.
The buildup in products points to a different story. Gasoline demand has softened from peak summer levels, matching the late-season pattern. Distillate demand remains flat, held back by lower trucking activity in parts of the Midwest. Refineries have trimmed runs, which should cap further product builds through September.
For crude traders, the focus shifts to official data from the Energy Information Administration on Wednesday morning. A larger-than-expected crude draw would reinforce the view that supply is tightening. A reversal–a crude build–would signal that production is outpacing demand again, a risk for near-term prices.
Cushing, Oklahoma, the delivery point for Nymex crude futures, saw inventories decline by around 400,000 barrels last week, according to the API. That put stocks at the hub near 35 million barrels, close to minimum operating levels. Further draws at Cushing could tighten the front-month spread and support prompt prices.
Brent crude traded near $85 a barrel ahead of the API release. Prices have been rangebound for weeks, caught between OPEC+ output discipline and fears of weaker demand from China and the US.
For traders following the crude oil supply-demand balance, the crude oil profile offers a longer-term view of inventory trends and seasonal patterns.
The EIA's weekly report is due at 10:30 a.m. Eastern on Wednesday.
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