US crude oil inventory drop API data showed a 3.2 million-barrel draw in the week ended October 2, not the 1.7 million-barrel build analysts expected. The cut brought stockpiles to 424.1 million barrels and came as exports jumped to 4.77 million barrels per day.
Andrew Lipow, president of Lipow Oil Associates, said the export surge was the main reason the market saw a surprise draw: "I think part of the surprise draw in crude oil happened to be the high level of exports that we saw during the past week, which was partially offset by an increasing amount of imports,". Traders and energy analysts now have a clearer read on the week’s balance: foreign demand pulled barrels out faster than domestic supply changes could replace them.
Cushing, Oklahoma Adds 444,000 Barrels
444,000 barrels were added at Cushing, Oklahoma, which offset part of the national decline and kept the draw from being even larger. Crude runs rose by 223,000 barrels per day and refinery utilization edged up 0.2 percentage points to 92.7%, showing that refiners were processing more oil even as exports did the heavier lifting.
53,000 barrels per day less crude arrived through net imports in the same period, another small support for the draw. The export increase was far larger than the rise in runs, so the weekly balance was driven more by barrels leaving the country than by slightly stronger refinery demand at home.
Gasoline Stocks Rise 382,000 Barrels
382,000 barrels were added to gasoline stocks, leaving inventories at 204.7 million barrels when analysts had looked for a 1.7 million-barrel draw. U.S. Gulf Coast gasoline stocks fell to their lowest level since September 2017, and Midwest gasoline inventories hit a record low, so the national build came even as two key regions stayed tight.
West Texas Intermediate settled down 3 cents to $89.41 per barrel after the report, while Brent traded at $101.54 per barrel around 11:06 a.m. ET, up 96 cents on the day. If the export-heavy pattern holds, the crude draw points to a tighter U.S. balance sheet than the forecast had suggested, but this week’s gasoline build shows the market is not moving in one direction at once.
