Key Takeaways:
- US crude stockpiles fell 2.8 million barrels in the week ended May 22
- Gasoline inventories dropped 3.2 million barrels, deepening supply concerns
- Brent crude slid 4.6% to $92.25 amid ceasefire hopes in the Strait of Hormuz
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US crude inventories fall for sixth straight week as supply tightens
US crude oil inventories fell for a sixth consecutive week, dropping 2.8 million barrels in the period ended May 22, according to American Petroleum Institute data released Wednesday, as persistent draws deepen a supply squeeze that has pushed gasoline stockpiles 5 percent below their five-year average.
"The continued drawdown in crude inventories reflects a market that remains structurally undersupplied despite elevated production levels," said market sources citing API data on condition of anonymity. "The six-week streak of declines is the longest sustained draw since early 2024."
Gasoline inventories fell 3.2 million barrels in the same week, extending a prior week's 5.8 million barrel decline and leaving stockpiles already 5 percent below the five-year seasonal average, according to the latest EIA data. Distillate inventories rose 1.1 million barrels after shedding 1 million barrels the prior week, though they remain 9 percent below the five-year average. Inventories at Cushing, Oklahoma — the delivery hub for the WTI crude futures contract — fell 2.875 million barrels, adding to a 1.4 million barrel decline in the prior week.
The draws come as the Strategic Petroleum Reserve continues to be tapped to alleviate price pressure, with 9.1 million barrels released in the week ending May 22, bringing total SPR holdings to 365.1 million barrels — the lowest since April 2024 and roughly 360 million barrels shy of maximum capacity. US crude production edged down to 13.702 million barrels per day for the week ending May 15 from 13.710 million bpd the prior week, though output remains 310,000 bpd above year-ago levels, EIA data show.
The inventory data landed against a backdrop of sliding crude prices, with Brent crude falling 4.6 percent to $92.25 a barrel and WTI dropping 5.5 percent to $88.68 on Wednesday, as a ceasefire between the United States and Iran appeared to hold, raising hopes for a reopening of the Strait of Hormuz. Brent has shed nearly $16 since last Tuesday, while WTI has fallen roughly $14.50 over the same period. US crude inventories have risen by 22 million barrels so far this year, API data show, suggesting the recent draw streak may reflect temporary factors including refinery maintenance and seasonal demand rather than a structural shift in the supply-demand balance.
The persistence of inventory draws — particularly in gasoline — threatens to keep upward pressure on pump prices heading into the summer driving season, even as the broader crude complex retreats on geopolitical détente. The last time gasoline inventories sat this far below the five-year average, retail prices rose more than 15 percent over the following two months, according to EIA historical data. The next official EIA inventory report is due Thursday and will be closely watched for confirmation of the API's findings.
This article is for informational purposes only and does not constitute investment advice.
