U.S. Crude Inventories Drop amid Continued SPR Draws

The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell 2.6 million barrels in the week ending August 28. In the week prior, US crude oil inventories rose by 4.2 million barrels.Commercial crude oil inventories excluding the SPR have lost just over 48 million barrels over the last twenty weeks, with US crude inventories up 3.1 million for the year, according to API data, kept in check by draws from the SPR.For week ending August 28, another 3.1 million barrels left the SPR to aid commercial inventories, bringing the new total inventory held in the SPR to 286.6 million barrels—a level that is 445 million barrels shy of maximum capacity.The generally accepted operational minimum for oil in the SPR is between 250-300 million barrels, below which the reserve may find it difficult to pump and process oil efficiently.US production for week ending August 21 rose to 13.843 million bpd, up from 13.830 in the week prior, and up 461,000 bpd from a year earlier.At 4:16 pm ET on Tuesday, Brent crude was trading up on the day at $95.28 (+5.9%), a nearly $7 per barrel gain week over week.WTI was also trading up on the day, by $5.08 per barrel (+5.92%) at $90.84, up nearly $9 per barrel from this time last week.Gasoline inventories rose this week by 300,000 barrels in the week ending August 28. In the week prior, gasoline inventories fell by 3.2 million barrels. In the week prior, gasoline inventories were already 6% below the five-year average for this time of year, according to the latest EIA data.Distillate inventories fell by 300,000 barrels, on top of the 500,000-barrel loss in the week prior. Distillate inventories were 14% below the five-year average heading into this reporting period, the latest EIA data shows.Cushing inventory—the inventory kept at the delivery hub for the WTI Crude futures contract—rose by 200,000 barrels over the reporting period after rising by 1 million barrels in the week prior.By Julianne Geiger for Oilprice.comMore Top Reads From Oilprice.comTwo Supertankers Hit by Unknown Projectiles in Strait of HormuzRussia Doubles Dark Fleet to Ship LNG to AsiaU.S. Energy Storage Capacity Installations Hit Record High in Q2