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U.S. Crude Oil Inventories Rise Amid Refinery Problems and Surging Imports

Strategic Insights

— 2 min read

Crude oil inventories in the United States surged by 2.6 million barrels to 456.21 million in the week ending August 14, according to data from the Energy Information Administration. This unexpected increase was driven by a significant rise in crude imports, which increased by 465,000 barrels per day to 7.46 million barrels per day. Refinery problems and weak driving demand during the summer season also contributed to the increase. As a result, U.S. oil prices extended their losses to a fresh 6-1/2-year low, with the September crude contract falling to $40.60, the lowest front-month price since March 2009.

Key Takeaways:

  • U.S. crude oil inventories rose by 2.6 million barrels to 456.21 million in the week ending August 14.
  • Crude imports surged by 465,000 barrels per day to 7.46 million barrels per day, the highest level in the past six weeks.
  • Refinery problems, including a shutdown at the BP Whiting refinery, led to a 254,000 bpd decline in refinery crude runs.
  • Gasoline stocks fell by 2.7 million barrels, while distillate stockpiles rose by 594,000 barrels.
  • U.S. oil prices extended their losses to a fresh 6-1/2-year low, with the September crude contract falling to $40.60.
  • Analysts attribute the bearish fundamentals to a combination of factors, including stronger dollar, weakness out of China, and refinery problems.

Statistics:

  • U.S. crude oil inventories rose by 2.6 million barrels to 456.21 million (EIA data).
  • Crude imports surged by 465,000 barrels per day to 7.46 million barrels per day (EIA data).
  • Refinery crude runs fell by 254,000 bpd (EIA data).
  • Gasoline stocks fell by 2.7 million barrels (EIA data).
  • Distillate stockpiles rose by 594,000 barrels (EIA data).
  • U.S. oil prices fell to $40.60, the lowest front-month price since March 2009 (EIA data).

Sources:

  • Energy Information Administration (EIA), EIA data shows U.S. crude inventories rose 2.6 million barrels, Reuters, August 19, 2020.
  • John Kilduff, partner at Again Capital LLC, "The report is bearish, with the focus squarely on crude oil and the large increase in overall inventories, due mostly to a surge in imports," quoted in Reuters, August 19, 2020.
  • Chris Jarvis, analyst at Caprock Risk Management, "This week's EIA data reaffirms the bearish fundamentals that continue to mount... Couple that with the stronger dollar and weakness out of China, and it's a recipe for lower prices ahead for crude," quoted in Reuters, August 19, 2020.

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