US Crude and Gasoline Inventories Continue to Decline

US crude oil inventories continued their downward trend, with the American Petroleum Institute (API) reporting a decrease of 564,000 barrels for the week ending July 10. This follows a 399,000-barrel draw in the preceding week. The consistent decline reflects a three-month period of significant inventory reduction, with commercial crude stocks (excluding the Strategic Petroleum Reserve, or SPR) having fallen by over 60 million barrels in the last twelve weeks. Despite this recent accelerated draw, the year-to-date net reduction in US crude inventories stands at a more modest 9.2 million barrels, according to API data. This discrepancy is largely attributed to concurrent draws from the SPR, which have partially offset the declines in commercial stockpiles. The sustained fall in commercial inventories signals robust demand or constrained supply dynamics within the US market. Gasoline inventories also experienced a notable decrease, falling by an estimated 2.38 million barrels for the week ending July 10. This marks the third consecutive weekly decline for gasoline stocks, indicating strong consumer demand as the summer driving season progresses. Distillate inventories, which include diesel and heating oil, saw an increase of 1.6 million barrels, suggesting varying demand patterns across refined products. The persistent drawdowns in crude and gasoline inventories could exert upward pressure on energy prices, impacting consumer spending and broader inflation metrics. For refiners, these trends suggest healthy margins driven by demand for refined products, while also potentially increasing crude input costs. The ongoing reliance on SPR releases to manage overall inventory levels highlights underlying market tightness that might otherwise be more pronounced.