U.S. Weekly Crude Oil Inventories Surge Beyond Expectations; Production Rises Steadily, Oil Prices Fluctuate Slightly

Recently, the American Petroleum Institute (API), the U.S. Department of Energy (DoE) and the U.S. Energy Information Administration (EIA) have successively released the latest energy data, disclosing the weekly changes in U.S. crude oil and various refined oil inventories and production. Data show that in the week ending February 20, U.S. commercial crude oil inventories achieved a much larger-than-expected increase, the Strategic Petroleum Reserve (SPR) remained stable, oil production rose steadily, while international crude oil prices fell slightly on the day, and gasoline and distillate inventories continued to decline.

In terms of commercial crude oil inventories, API estimated data show that in the week ending February 20, U.S. crude oil inventories increased by 11.4 million barrels, significantly exceeding market expectations — analysts had previously expected an inventory increase of only 1.85 million barrels. This change is in sharp contrast to the inventory trend of the previous week, when U.S. crude oil inventories decreased by 609,000 barrels. The sharp rebound in total inventories reflects a phased loose situation on the U.S. domestic crude oil supply side.

Regarding the Strategic Petroleum Reserve (SPR), the U.S. Department of Energy (DoE) reported that in the week ending February 20, U.S. SPR crude oil inventories remained at 415.4 million barrels, maintaining a continuous upward trend. It is reported that the maximum authorized storage capacity of the U.S. SPR is 714 million barrels, and the current inventory is still 310.1 million barrels away from the maximum capacity, leaving considerable room for reserve improvement. As the world’s largest emergency crude oil supply reserve, the SPR is mainly used to mitigate the impact of oil supply disruptions, and the steady increase in its inventory helps enhance the security of U.S. energy supply.

In terms of production, the latest data from the U.S. Energy Information Administration (EIA) show that U.S. daily oil production increased by 22,000 barrels compared with the previous period, with an average daily production of 13.735 million barrels in the week ending February 13, an increase of 238,000 barrels per day compared with the same period last year. The steady improvement in production level demonstrates the stable resilience of U.S. crude oil production and also provides support for the growth of domestic crude oil inventories.

In terms of oil price performance, at 4:14 p.m. Eastern Time on the day, international crude oil prices showed a slight downward trend. Among them, Brent crude oil was quoted at $71.40 per barrel on the day, a decrease of 0.13%. Although it fell slightly on the day, compared with the same period last week, the price per barrel still rose by about $1, maintaining mild fluctuations overall; West Texas Intermediate (WTI) crude oil fell by $0.09 on the day to close at $66.22 per barrel, a decrease of 0.14%. As the two core benchmarks for global crude oil pricing, the price difference between Brent crude oil and WTI crude oil is mainly due to differences in their geographical locations, transportation costs and market positioning. Brent crude oil usually maintains a certain premium due to its convenient maritime transportation and wider global influence.

In terms of refined oil inventories, various products showed varying degrees of decline. In the week ending February 20, U.S. gasoline inventories decreased by 1.53 million barrels, continuing the downward trend of the previous week, when gasoline inventories decreased by 312,000 barrels; EIA data show that as of last week, U.S. gasoline inventories were 3% higher than the five-year average for this period of the year, and overall inventories were in a reasonable range. In the same period, distillate inventories also decreased by 2.77 million barrels, a further expansion from the decrease of 1.56 million barrels in the previous week; as of the week ending February 13, distillate inventories were 5% lower than the five-year average, and inventories were at a relatively low level.

It is worth noting that Cushing inventories fluctuated significantly. As the core delivery center for WTI crude oil futures contracts, changes in Cushing inventories have a direct impact on WTI oil prices. Data show that inventories in the region decreased by 1.36 million barrels compared with the previous week, but rebounded this week, increasing by 1.79 million barrels. The phased fluctuations in inventories reflect the dynamic adjustment of U.S. inland crude oil allocation and also correspond to changes in the market supply and demand of WTI crude oil — as a landlocked crude oil benchmark, WTI prices are vulnerable to local inventory and logistics conditions.

Industry analysts believe that the much larger-than-expected increase in U.S. crude oil inventories this week is mainly affected by the steady increase in production and the phased stability on the demand side; the continuous decline in gasoline and distillate inventories reflects the steady release of refined oil consumption demand. Currently, international crude oil prices maintain mild fluctuations, and various changes in U.S. energy data will further affect the supply and demand pattern and price trend of the global crude oil market.