Key Takeaways: US commercial crude inventories rose 95,000 barrels to 428.9 million in the week ended Aug. 21, a fourth straight build that undershot the 500,000 barrels analysts forecast. Gasoline stocks fell 2.5 million barrels to 206.8 million, about 6 percent below the five-year average, while distillate dropped 2.2 million barrels to 103.4 million. The EIA projects Brent averaging about $85 a barrel in the third quarter before easing to $69 in 2027.
US commercial crude inventories rose for a fourth straight week, but the 95,000-barrel build came in well below the 500,000 barrels analysts expected.
US commercial crude inventories rose 95,000 barrels to 428.9 million in the week ended Aug. 21, a fourth consecutive build that undershot the 500,000 barrels analysts forecast, while draws in gasoline and distillate deepened.
The build, reported in the Energy Information Administration's Weekly Petroleum Status Report, left stocks about 1 percent above the five-year average for the time of year, the agency said. Analysts surveyed by The Wall Street Journal had projected a 500,000-barrel increase, making the actual figure the smallest weekly addition of the four-week run.
Crude production held steady at an estimated 13.8 million barrels a day, up 13,000 barrels from the prior week, while imports fell 435,000 barrels a day to 6.2 million and exports dropped 274,000 barrels a day to 3.8 million. Refineries ran at 97.4 percent of capacity, up from 97.2 percent, with crude input virtually unchanged at 17.4 million barrels a day. Gasoline inventories declined 2.5 million barrels to 206.8 million, about 6 percent below the five-year average, as demand rose 355,000 barrels a day to 9 million. Distillate stocks fell 2.2 million barrels to 103.4 million, roughly 14 percent below the seasonal norm.
The modest build, smaller than expected, offers slight support for crude prices even as the EIA projects US output will set a record this year. The agency's August Short-Term Energy Outlook sees Brent averaging about $85 a barrel in the third quarter before easing to $69 in 2027 as Middle East production recovers, with US commercial inventories expected to stay below the five-year low through the end of 2026.
Refineries operated at 97.4 percent of capacity, up from 97.2 percent the prior week, with crude input essentially flat at 17.4 million barrels a day. The high utilization rate, combined with falling imports and exports, kept the crude build minimal despite steady production. Oil stored at Cushing, Oklahoma, the Nymex delivery hub, rose 1.2 million barrels to 22.4 million, while the Strategic Petroleum Reserve fell 3.7 million barrels to 289.7 million on continuing emergency releases.
The inventory picture points to a market that remains tight on refined products even as crude supply looks ample. Gasoline stocks at 6 percent below the five-year average and distillate at 14 percent below highlight the drawdown in products, which typically supports refinery margins. For consumers, sustained product draws could keep retail fuel prices elevated, though the EIA projects US gasoline to average $3.78 a gallon this year and $3.29 next year.
The data arrives as the EIA expects US crude production to reach a record 13.8 million barrels a day this year, accounting for 18.4 percent of projected global output. With Strait of Hormuz transit constraints expected to persist through August and most Middle East production not recovering until early 2027, the balance between record US supply and disrupted global flows will determine whether Brent holds near $85 or drifts toward the $69 forecast for next year. The last time Brent traded near $85 in the third quarter, US inventories were drawing at a similar pace and prices held that level for several weeks before seasonal demand softened.
This article is for informational purposes only and does not constitute investment advice.
