US crude stockpiles drop 4.5M barrels as refinery runs hit 98%

US commercial crude inventories fell 4.5 million barrels last week, 15 times the drawdown analysts had projected, as refineries ran at 98 percent capacity and crude exports climbed to 4.5 million barrels a day.

The decline, reported in the Energy Information Administration's weekly petroleum status report, left stockpiles at 424.5 million barrels, about 1 percent above the five-year seasonal average. Analysts surveyed by the Wall Street Journal had forecast a 300,000-barrel decrease.

Refinery crude input rose 102,000 barrels a day to 17.5 million, with utilization climbing to 98 percent from 97.4 percent the prior week — the opposite of the 0.3 percentage point decline analysts expected. Domestic production edged up 19,000 barrels a day to 13.86 million, while imports jumped 612,000 barrels a day to 6.8 million and exports rose 691,000 barrels a day to 4.5 million. Oil stored in the Strategic Petroleum Reserve fell 3.1 million barrels to 286.6 million, while Cushing, Oklahoma, stocks — the Nymex delivery hub — gained 80,000 barrels to 22.5 million.

The scale of the drawdown suggests the physical market is tighter than consensus models anticipated heading into September, when refinery maintenance season typically trims crude demand. Yet the demand side of the ledger is less supportive. Gasoline inventories fell 1.2 million barrels to 205.7 million — 6 percent below the five-year average — but gasoline demand dropped 121,000 barrels a day to 8.9 million, pointing to softer consumer fuel consumption as the summer driving season winds down. Distillate stocks rose 796,000 barrels to 104.2 million, 14 percent below the seasonal norm, against forecasts for a 1.9 million-barrel decline.

The mixed signals complicate the supply-tightness narrative. Refineries running near full capacity are converting crude into products at a pace that should keep crude draws elevated in the near term, but the softening in gasoline demand and the build in distillate inventories suggest product consumption is losing momentum. If that trend persists into September, refiners may pull back on crude runs, easing pressure on crude stockpiles even as the market digests the current drawdown.

The data also highlights the role of exports in draining domestic inventories. Crude exports rose to 4.5 million barrels a day, up 691,000 from the prior week, while imports climbed to 6.8 million barrels a day. The widening export-import dynamic reflects strong international demand for US crude grades, particularly as global supply remains constrained.

For traders, the key question is whether this week's drawdown marks the start of a sustained tightening cycle or a one-off data point. Stockpiles at 424.5 million barrels remain above the five-year average, suggesting the market is not yet undersupplied. The next EIA report, covering the week ending Sept. 4, will show whether refinery runs hold near 98 percent and whether the drawdown extends — data that will shape crude price direction as the market transitions from summer demand to the autumn maintenance season.

This article is for informational purposes only and does not constitute investment advice.