- Prior was +17.423M
- Gasoline +0.688M vs -1.504M expected
- Prior was -0.968M
- Distillates -1.530M vs -0.982M expected
- Prior was -0.010M
While the increase was significantly smaller than the previous week’s massive 17.423 million-barrel build, it still points to continued accumulation of crude stocks and a relatively loose US supply-demand balance.
The product data was also weaker than expected. Gasoline inventories increased by 688,000 barrels, compared with expectations for a 1.504 million-barrel draw, while distillate stocks fell by 1.530 million barrels, only modestly larger than the expected 982,000-barrel draw.
One of the most notable data was the collapse in US imports of Saudi crude, which fell by 91%. The US has increasingly relied on alternative suppliers, while Canada remains by far its largest source of imported crude. Recent EIA data showed that Canadian barrels accounted for roughly two-thirds of US crude imports, while imports from Saudi Arabia and other sources have become much smaller.
The decline in Saudi flows is due to severe disruption to Middle Eastern shipping routes. The conflict around the Strait of Hormuz and threats to Saudi shipments through the Red Sea have already forced Saudi crude tankers to change course.
At the headline level, the inventory data is bearish. In reality, the inventory data is never a market-moving release as oil prices are mainly moved by global growth expectations, OPEC decisions and geopolitical events.
Chart: WTI crude oil 1-hour timeframe
WTI crude has been trading in a tight range since the Monday’s spike after Trump cast doubt on a US-Iran deal. It’s been a steady grind higher since the selloff triggered by US Treasury Secretary Bessent’s comment on August 4, when he said that a deal with Iran was imminent. The market has almost erased the entire drop since Trump called off the planned strikes on Iran on August 3.
This article was written by Giuseppe Dellamotta at investinglive.com.