This morning, US commercial crude inventory saw the first draw since September, down by 431,000 barrels last week. At the same time, inventory of the Strategic Petroleum Reserve(SPR) continued to decline from 616.97 million barrels to 615.28 million barrels from last week. Domestic oil production declined from 11.4 million barrels per day to 11.3 million barrels per day last week, again, largely due to oil production changes in the state of Alaska while the lower 48 states saw a minimum change. Crude imports were also down last week, about 5.8 million barrels per day for the week ending in 10/15.
According to U.S. Energy Information Administration(EIA) report, refinery inputs averaged about 15.0 million barrels per day from last week, slightly down from the previous week. Distillate fuel inventories decreased by 3.9 million barrels last week and are about 10% below the five-year average for this time of year. Total motor gasoline inventories decreased by 5.4 million barrels last week and are about 3% below the five-year average for this time of year. Both reports continued to repeat the pattern of drawing down of fuel stocks as the previous week. This trend is similar to last year when we saw Western Texas Intermediate(WTI) Crude price rose from 40 dollars a barrel at the beginning of October 2020 to 61 dollars a barrel in January 2021.
During afternoon trading hours, the WTI contract for December settled up 98 cents to $83.42 a barrel. Brent Futures was also up 74 cents, at $85.82 a barrel. While crude oil was in the overbought zone, the strong momentum of price moving action, as well as bullish energy reports amid global energy crunch, signaled continuous bullish signs for the future.
Heading into the winter season, holiday travelings, as well as heating demand, will continue to drive up gasoline demand as well as demand for diesel fuel and propane products. At the same time, consumers in the U.S continued to experience higher gasoline and heating prices for the past several weeks. The trend is not looking good for consumer spending while adding significant risks to inflation growth.