US Refinery Activity Ramps Up, Crude Inventories Fall: EIA

US crude oil refinery inputs rose for the week ending May 3, 2024, averaging 15.9 million barrels per day, a gain of 307,000 barrels per day over the previous week, according to the latest data from the Energy Information Administration (EIA). This increased activity pushed refinery utilization to 88.5% of operable capacity.

The surge in refinery inputs drove higher production of gasoline and distillate fuel, which averaged 9.5 million barrels per day and 4.8 million barrels per day respectively. This increased production coincided with a decrease in US commercial crude oil inventories (excluding the Strategic Petroleum Reserve), which fell by 1.4 million barrels to 459.5 million barrels. This level remains approximately 3% below the five-year average for this time of year.

Gasoline inventories bucked the trend, increasing by 0.9 million barrels, although they remain about 2% below the five-year average. Distillate fuel inventories also rose, adding 0.6 million barrels, but still sit approximately 7% below the five-year average.

The EIA also reported that total product supplied over the past four weeks averaged 19.9 million barrels per day, a slight decrease compared to the same period last year. Over this period, motor gasoline product supplied averaged 8.6 million barrels per day, down 4% year-on-year, while distillate fuel product supplied averaged 3.6 million barrels per day, a 6.6% decline compared to the same period last year. Jet fuel, however, saw a 3.5% increase in product supplied year-on-year.

The EIA data points to a potential tightening of the oil market. Despite an increase in refinery activity and a slight dip in total product supplied compared to last year, the continued decline in crude oil inventories, alongside below-average gasoline and distillate fuel stockpiles, suggests ongoing demand pressures. This could lead to upward price pressure on refined products, particularly as the summer driving season approaches.