U.S. Petroleum inventories have declined below the pre-pandemic five-year average with consumption accelerating. The crude producers stall to respond to rising prices, signalling more supply is needed.Crude stocks and refined products outside the strategic Petroleum reserve fell by 10 million barrels last week and are now down by 188 million barrels compared with the same point a year ago.
According to data from the U.S. Energy Information Administration, total stocks have dropped in 38 out of the last 52 weeks as OPEC+. U.S. shale firms limit crude production even as product consumption recovers. Inventories are 12 million barrels or 1% below the pre-pandemic five-year average for 2015-2019.
The shortfall has pushed the WTI contract into a steep backwardation, with front-month futures trading at a premium of almost $2.90 to the fourth delivery month, which is in the 7th percentile for all weeks since 2012.On the refined products side, the volume of gasoline supplied to the domestic market hit a record 10.0 million barrels per day last week, surging from 9.2 million BPD the previous week. The gasoline supplied measures transfers from the primary Petroleum system into the secondary system rather than actual consumption by motorists.