Last week, U.S. crude oil inventories took an unexpected nosedive, accompanied by a surge in exports, according to the Energy Information Administration (EIA) report released on Wednesday.
The data revealed a significant drop in crude stocks by 6.4 million barrels to 453.6 million barrels for the week ending April 19.
This stark decline starkly contrasts with analysts’ projections, who anticipated a rise of 825,000 barrels, as per a Reuters poll.
The plunge in crude oil inventories was primarily attributed to a substantial increase in exports, marking the most significant weekly rise this year, with exports soaring by 453,000 barrels per day (bpd) to reach 5.18 million.
Concurrently, net U.S. crude imports saw a notable decline of 417,000 bpd, noted the EIA.
Bob Yawger, director of energy futures at Mizuho, remarked, “It was all about the exports.”
He emphasized the unexpected nature of this event, particularly in light of the tensions in the Red Sea.
Yawger noted, “You would think that would happen a lot more often because of the squeeze in the Red Sea.
“I always thought that would chase customers to the Gulf Coast and you’re really seeing that for the first time this year in this report.”
Additionally, inventories at the Cushing, Oklahoma, delivery hub for futures experienced a decrease, falling by 659,000 barrels during the week, according to the EIA.
Following the release of the data, U.S. crude futures and gasoline futures initially turned positive but later saw declines of 80 cents and 0.3%, respectively, by 11:10 a.m. ET (1510 GMT).
UBS analyst Giovanni Staunovo interpreted the large crude draw as a consequence of exceptionally high crude exports.
However, he cautioned that this might be a one-off occurrence, citing preliminary tanker tracking data indicating lower exports for the current week.
Moreover, gasoline stocks saw a decrease of 600,000 barrels to 226.7 million barrels, slightly below the forecasted draw of 1.8 million barrels.
Refinery crude runs experienced a decrease of 42,000 bpd, while refinery utilization rates rose by 0.4 percentage point during the week.
Distillate stockpiles, encompassing diesel and heating oil, saw a surprising increase of 1.6 million barrels to 116.6 million barrels, contrary to the anticipated drop of 1.1 million barrels.