US crude and product stockpiles dropped further for the week of February 21, said the US Department of Energy.
Against market expectations, US crude oil imports continued to fall, dropping 400,000 barrels/day to 8.3 million b/d during the week of February 21.
Crude oil inventories were drawn down by 1 million barrels to make up for the import shortfall. Refinery throughput at nearly 14.5 million barrels was insufficient to meet demand levels, also resulting in drawdown in inventory drawdown.
The DoE said: “Since the week ending January 24, crude oil imports have averaged less than 8.3 million b/d, while refinery inputs have averaged less than 14.2 million b/d. With reduced crude oil refinery inputs comes less refinery output.
“As a result, over this 5-week period total petroleum product inventories have plummeted by more than 45 million barrels, or about 1.3 million barrels per day. Although crude oil refinery inputs have been insufficient to keep product stocks from plunging, crude oil inventories have not risen; in fact they’ve been drawn down by 2.0 million barrels during the same period.
“Normally, if crude oil refinery inputs are relatively low, crude oil not going into refineries is put into inventories. But with crude imports averaging closer to 8 million b/d as opposed to 9 million barrels per day, crude oil inventories and product inventories (as a result of lower production levels) are likely to remain low for quite some time, or at least until oil demand drops significantly for a sustained period.”
The DoE said that without sustained crude oil imports at 9 million b/d or more, US crude and product inventory levels will remain low.