By Barani Krishnan
Investing.com -- U.S. crude stockpiles fell sharply for a second week in a row, accompanied by large drawdowns as well in gasoline and distillates inventories as domestic refiners prepared for busy summer travels, weekly government data released on Wednesday showed.
Crude balances in storage fell by 3.739 million barrels during the week ended March 31, the U.S. Energy Information Information, or EIA, said in its Weekly Petroleum Status Report. In the previous week to March 24, crude stockpiles tumbled by 7.489M barrels.
Analysts tracked by Investing.com had expected the EIA to report a crude balance decline of 2.329M barrels instead.
Adding to the crude draw was the US government’s release of 3.7 million barrels from the Strategic Petroleum Reserve, or SPR, last week. It was the first SPR draw of its kind for this year although it was scheduled from last year as part of the 2022 budget. The Biden administration had leaned on the reserve heavily since late 2021 to offset tight crude supplies that had raised fuel costs for Americans. As of last week, the SPR’s crude balance was at its lowest since November 1983.
On the gasoline inventory front, the EIA cited a drawdown of 4.119M barrels versus the forecast drop of 1.729M barrels, and against the previous weekly decline of 2.904M barrels. Automotive fuel gasoline is the No. 1 U.S. fuel product.
With distillate stockpiles, the EIA reported a 3.632M barrel draw, against expectations for a drop of 0.396M barrels and versus the prior week's build of 0.281M. Distillates, which are refined into heating oil, diesel for trucks, buses, trains, and ships, and fuel for jets, had been the strongest demand component earlier in the year.