US oil inventories fall as imports, exports plunge, but rising product stocks weigh on sentiments

Crude oil inventories in the US fell less than expected in the week ended December 6 as both exports and imports slumped, the Energy Information Administration said. 

In the week ended December 6, inventories in the US fell by 1.4 million barrels to 422.0 million barrels, the EIA said in its weekly report late on Wednesday. 

Analysts had expected oil stockpiles to fall by just 1.0 million barrels last week. However, last week’s decline was sharply lower than the 5.1-million-barrels fall in the week ended November 29. 

Inventories were about 6% below the five-year average for the time of the year, EIA said.. 

Refineries in the US operated at 92.4% of their operable capacity last week, compared with 93.3% in the preceding week, the agency said. 

Though the fall in inventories was bullish for oil prices, a significant rise in product stocks offset the positive sentiments in the market, somewhat. 

At the time of writing, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was at $70.38 per barrel, up 0.1%. Brent crude on the Intercontinental Exchange was at $73.67 per barrel, up 0.2% from the previous close.

Product stocks surge

EIA said gasoline inventories in the US surged by 5.1 million barrels to 219.7 million barrels last week. 

Gasoline stocks were about 4% below the five-year average last week, the agency said. 

Meanwhile, distillate stockpiles also rose by 3.2 million barrels to 121.3 million barrels last week, the data showed. Stocks were about 4% below the five-year average. 

Stocks of fuel ethanol declined 400,000 barrels to 22.6 million barrels, while those of residual fuel fell by 700,000 barrels to 23.7 million barrels. 

Meanwhile, stocks of propane and propylene declined by 3 million barrels to 93.1 million barrels last week.

The build-up of gasoline and distillate stocks points to lower exports of petroleum products by the US.  

Oil production rises

Production of oil in the world’s largest producer increased last week by just 118,000 barrels per day to a record high of 13.631 million barrels per day.

Production in Alaska fell 5,000 barrels per day to 441,000 barrels per day. 

Oil output increased by 123,000 barrels per day in the Lower 48 US states to 13.190 million barrels per day, the EIA said. 

EIA had earlier this week projected that average annual production is expected to be at record levels this year at 13.24 million barrels per day.

This is about 300,000 barrels per day higher than 2023’s average level. 

Similarly, in 2025, production in the US is expected to scale new heights, averaging 13.52 million barrels per day, the agency said. 

Reports have claimed that US President-elect Donald Trump is likely to approve a plan in his first few days back at the White House to increase drilling for oil and gas on federally owned lands and off the coasts of the country.

Analysts at Commerzbank AG have said Trump’s policies are likely to increase crude oil production in the US in the medium to longer term. 

Imports and exports plunge

Crude oil imports by the US plunged by as much as 1.31 million barrels per day to 5.984 million barrels per day last week. Imports fell sharply after a steep rise in the preceding week ending November 29. 

The four-week average for imports last week was up 2.5% on a year-on-year basis to 6.760 million barrels per day. 

Exports fell by 1.14 million barrels per day to 3.099 million barrels per day last week, EIA said. 

The four-week average for exports was down 7.2% on a year-on-year basis to 4.094 million barrels per day. 

Oil imports from Canada fell by 215,000 barrels per day last week to 3.829 million barrels per day. Imports from Saudi Arabia also declined by 217,000 barrels per day to 175,000 barrels a day.

Trump recently said that he intends to impose a 25% tariff on Mexican and Canadian imports to the US, which is likely to include oil as well. 

Imports from most other countries fell last week.