USA: jump in oil stocks but sharp drop in strategic reserves

U.S. commercial crude oil reserves surged unexpectedly last week but that reflects a large drawdown on U.S. strategic reserves, according to data from the U.S. Energy Information Agency (EIA) on Wednesday. .

U.S. crude inventories rose 8.5 million barrels to 424.2 million for the week ending May 6.

At the same time, the US administration has put on the market for 7 million barrels, drawn from its strategic reserves which fall to 543 million barrels.

Analysts were betting on a slight reduction in crude inventories of 1.4 million barrels.

Excluding the contribution from strategic reserves, they actually increased slightly by 1.5 million barrels.

Around 3:15 p.m. GMT, crude prices on the upward slope since the opening, maintained their momentum after two sessions of decline.

A barrel of North Sea Brent crude for July delivery gained 4.34% to $106.90, while US West Texas Intermediate (WTI), with June maturity, gained 4.88% to $104.63 .

“The 7 million barrels drawn from strategic reserves are the main driver of this swelling of stocks”, underlined Matt Smith of Kpler. “But we will now have to get used to these important transfers,” he warns.

Since the beginning of September, Joe Biden’s government has been drawing on strategic reserves, which have melted by more than 78 million barrels in the past seven months, with a view to lowering prices at the pump.

These again reached records on Tuesday and Wednesday at 4.40 dollars per gallon (3.78 liters) on average in the United States, according to the AAA (American Automobile Association) which has kept these statistics since 2000.

Since the invasion of Ukraine by Russia and the sanctions, which heighten the tension on the price of oil, more than 30 countries are on the way to follow the United States and to draw on their strategic reserves, according to the Democratic president .

US demand for petroleum products has eased a little as temperatures are warming. It stood at 19.2 million barrels per day (mb/d), down 235,000 barrels.

Imports remained stable at 6.2 mb/d while exports fell by 695,000 barrels to 2.8 mb/d.

US crude production fell modestly to 11.8 mb/d (-100,000 b/d).