US crude stocks fall as Brent crude climbs above $100

Brent crude oil prices have risen above the $100 per barrel mark, driven by a reported decline in United States crude inventories. Trading data from Wednesday afternoon indicated that Brent crude was up by 3.62 per cent to reach $101.46, representing a weekly gain of nearly six dollars per barrel. West Texas Intermediate crude also strengthened, increasing by 3.67 per cent to $96.44, which is also an increase of almost six dollars compared to the same time in the previous week.

The American Petroleum Institute estimated that US crude oil inventories decreased by 300,000 barrels during the week ending September 4. This follows a more substantial drop of 2.6 million barrels in the preceding week. Over the last 21 weeks, commercial crude oil inventories, excluding the Strategic Petroleum Reserve, have lost just over 48 million barrels. Despite this recent drawdown, US crude inventories are up by 2.8 million barrels for the year, a figure kept in check by withdrawals from the strategic reserve. An additional 1.2 million barrels were removed from the SPR during the week ending September 4 to support commercial stocks, reducing the total SPR inventory to 285.4 million barrels. This current level is 446 million barrels below maximum capacity, though it remains above the generally accepted operational minimum of 250 to 300 million barrels required for efficient pumping and processing.

US crude production continued its upward trend, rising to 13.862 million barrels per day for the week ending August 28. This represents an increase from 13.843 million barrels per day in the prior week and is 423,000 barrels per day higher than levels recorded a year earlier. In the refined products sector, gasoline inventories fell by 1.9 million barrels in the week ending September 4, reversing a 300,000-barrel increase seen in the previous week. Gasoline stocks were already 6 per cent below the five-year average for this time of year. Conversely, distillate inventories gained 2 million barrels, following a 300,000-barrel loss in the prior period, although these stocks remained 14 per cent below the five-year average.

Inventory levels at Cushing, the primary delivery hub for WTI crude futures contracts, also declined. Stocks in this location fell by 300,000 barrels over the reporting period, after having risen by 200,000 barrels in the week before. These inventory movements and production figures provide context for the recent price strength observed in global oil markets, with both benchmark contracts trading significantly higher than their levels from one week ago.