U.S. Crude Stocks Hit Yearly Low, Fuel Inventories Show Moderate Builds

U.S. crude oil inventories dropped by 1.6 million barrels to 417.5 million barrels, reaching their lowest level in a year, according to the Energy Information Administration (EIA). Stocks at the Cushing, Oklahoma hub fell by 2 million barrels, marking their 10th decline in 11 weeks. Despite earlier losses, Brent and WTI futures recovered, with Brent trading at $73.53 per barrel and WTI at $71.10. Meanwhile, gasoline and distillate stockpiles rose by 100,000 barrels each, less than expected, which provided support to fuel futures. U.S. crude imports also fell significantly, by 1.8 million barrels per day, due to disruptions caused by Hurricane Francine.

Key Highlights
# U.S. crude inventories fall to 417.5 million barrels, lowest in a year.
# Cushing stockpiles dip for the 10th time in 11 weeks.
# Brent and WTI futures recover from early losses, supported by inventory data.
# Gasoline and distillate stockpiles rise less than expected.
# Hurricane Francine disrupts Gulf Coast port activity, affecting crude imports.

U.S. crude oil inventories dropped to their lowest level in a year, falling by 1.6 million barrels to 417.5 million barrels for the week ending September 13, according to the Energy Information Administration (EIA). The decline surpassed analyst expectations, marking the lowest level of crude stocks, excluding the Strategic Petroleum Reserve, since September 2023. This decline was more pronounced at the Cushing, Oklahoma hub, where stocks decreased by 2 million barrels, marking 10 drops over the past 11 weeks. Matt Smith from Kpler pointed out the continuing trend of falling Cushing inventories, which are now at concerningly low levels.

On the price front, Brent crude futures recovered slightly, trading at $73.53 per barrel, while West Texas Intermediate (WTI) futures were at $71.10 per barrel. Both benchmarks pared early session losses after trading 70 cents lower earlier in the day. The tight supply at Cushing and the broader decline in U.S. crude stocks supported price stabilization despite initial market losses.

In related news, gasoline and distillate stockpiles rose by 100,000 barrels each, falling short of the anticipated increases. This smaller-than-expected build provided some support for gasoline and heating oil futures, which turned positive following the release of the inventory report. Additionally, U.S. crude imports fell by 1.8 million barrels per day due to reduced port activity caused by Hurricane Francine.

Finally
The ongoing drawdown in U.S. crude stocks, especially at Cushing, is tightening supply, supporting prices amid moderate fuel inventory builds and import disruptions.