In a surprising move, crude oil inventories increased to 396 million bbl last week after five consecutive weeks of decline, according to the Energy Information Administration (EIA). Despite the increase, domestic crude inventories are now roughly 75 million bbl lower than were they were at this time last year. The multiple weeks of inventory decline imply there is tightening in the crude market ahead of what is expected to be a volatile fall due to U.S.-imposed sanctions on Iran and economic collapse in Venezuela reducing global crude supply. The new crude data from EIA will likely leave the market searching for additional evidence of supply constraints, including next week’s EIA report, that could push crude prices higher this fall.
Domestic Oil Inventories on the Rise