U.S. crude oil inventories decreased by 1.7 million barrels for the week ending July 10, according to data from the U.S. Energy Information Administration (EIA) released on Wednesday. This decline brings total commercial stockpiles to 409.7 million barrels, which is 6% below the five-year average for this time of year.
Key Details
The EIA's report follows earlier figures from the American Petroleum Institute (API), which indicated a smaller draw of 564,000 barrels. Despite the inventory decline and rising tensions between the United States and Iran, crude futures were down during morning trading on Wednesday. Brent futures were priced at $84.08 per barrel, down $0.65 (-0.77%) from the previous session, while West Texas Intermediate (WTI) fell by $0.21 (-0.26%) to $79.13 per barrel.
Background
In addition to crude, the EIA reported a decrease of 1.5 million barrels in total motor gasoline inventories. Average daily gasoline production fell to 9.6 million barrels. Conversely, middle distillate inventories rose by 4.6 million barrels, with production increasing to an average of 5.3 million barrels daily. Distillate inventories are now 11% below the five-year average. Total products supplied, a proxy for U.S. oil demand, averaged 20.3 million barrels per day over the last four weeks, up 0.3% compared to the same period last year. However, gasoline demand averaged 8.9 million barrels per day, while distillate supply averaged 3.7 million barrels, down 2.1% year over year.
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The decline in crude inventories could support oil prices, particularly in light of ongoing geopolitical tensions, which may lead to supply disruptions. Investors will watch for further developments regarding U.S.-Iran relations and their potential impact on oil supply and prices.