US Crude and Gasoline Inventories Continue Sharp Decline

U.S. crude oil inventories experienced a significant draw of 3.3 million barrels for the week ending May 22, according to the U.S. Energy Information Administration (EIA). This reduction places commercial crude stockpiles at 441.7 million barrels, now 2% below the five-year average for this period. The EIA's official data aligns with earlier industry figures from the American Petroleum Institute (API), which had reported a 2.8 million barrel decrease for the same timeframe. Simultaneously, U.S. gasoline inventories also saw a substantial decline, falling by 5.2 million barrels during the week. This marks the largest weekly decrease in gasoline stockpiles since September 2023. The combined draw in crude and refined products signals robust demand or constrained supply dynamics within the domestic energy market. Distillate fuel inventories, which include diesel and heating oil, added to the trend with a decrease of 1.7 million barrels. Overall product supplied, a proxy for demand, averaged 19.9 million barrels per day (bpd) over the past four weeks, representing a 2.3% increase from the same period last year. Notably, gasoline product supplied averaged 9.1 million bpd, up by 1.6% year-on-year, while distillate product supplied averaged 3.8 million bpd, an increase of 2.1%. Crude oil production remained steady at 13.1 million bpd for the eighth consecutive week, indicating that current demand is outpacing domestic output and/or imports. These inventory declines typically signal a tightening market, potentially supporting upward pressure on crude oil and refined product prices. The ongoing draws below the five-year average suggest a structural shift in supply-demand balances or sustained strength in energy consumption, even as seasonal driving demand approaches its peak.