Recently, the EIA announced that crude inventories grew unexpectedly last week. Analysts had expected a decrease of around 3.5 million barrels, but instead inventories grew by 1.2 million barrels. This was due to increased imports to feed refineries that are running at record rates. The U.S. imported 1.4 million barrels per day more than the prior week, even as domestic crude production held steady at 10.9 million barrels per day. However, refinery run rates did drop slightly last week which resulted in gasoline inventories falling by 1.5 million barrels compared to expectations of an 800,000 barrel drop.
As speculation around oil supply shortages have boosted crude prices, markets are watching downstream. U.S. refineries, the world’s largest, are running at their greatest throughput in history – over 18 million barrels per day last week. As oil markets watch dropping oil inventories, gasoline inventories are doing the opposite and starting to make news as they climb. The U.S. currently has 25.4 days of gasoline in storage right now, 4% more than the five year average. To wrap up, WTI ended the day at $73.12 per barrel and Brent crude closed at just over $77 per barrel on Thursday.