In a new report released by the U.S. Energy Information Administration (EIA), crude oil and fuel inventories across the United States declined notably last week, while imports of Nigerian crude surged to levels last seen in October 2019.
According to the data for the week ending May 23, U.S. crude stockpiles dropped by 2.8 million barrels, bringing total inventories down to 440.4 million barrels. This unexpected drawdown contrasts sharply with analyst forecasts, which had predicted a slight increase of 118,000 barrels, as per a Reuters survey.
Export Growth and Holiday Demand Fuel Drawdowns
The decline was largely driven by a jump in U.S. crude exports, which rose by 794,000 barrels per day (bpd) to 4.3 million bpd. Analysts see this increase in outbound shipments as a key factor behind the inventory dip.
UBS analyst Giovanni Staunovo noted that strong demand for gasoline and diesel ahead of the Memorial Day holiday contributed to the drop. “Higher exports and increased domestic demand for fuel led to notable drawdowns,” he said.
Fuel Inventories and Refinery Activity
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Gasoline inventories fell by 2.4 million barrels to 223.1 million barrels, significantly exceeding the expected draw of 527,000 barrels.
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Distillate stocks, which include diesel and heating oil, declined by 724,000 barrels to 103.4 million barrels, defying projections for a 481,000-barrel increase.
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Notably, U.S. distillate inventories are now at their lowest point since April 2005, with Midwest stocks at their weakest since November 2017.
Gasoline demand saw a strong rebound, with supply figures jumping to 9.45 million bpd, up from 8.64 million bpd the previous week.
Refinery operations, meanwhile, slowed slightly. Crude processing rates dropped by 162,000 bpd, while utilization rates edged down by 0.5 percentage points to 90.2%.
Nigerian Crude Makes a Comeback
One of the standout details in the report is the sharp rise in crude imports from Nigeria, which climbed by 358,000 bpd to 364,000 bpd—the highest figure recorded in nearly six years. This surge is attributed in part to disruptions at Nigeria’s Dangote refinery, which was offline between April 7 and May 11.
Market Reaction and Pricing
Despite the bullish inventory data, oil prices remained subdued:
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Brent crude was down 56 cents, trading at $64.34 a barrel.
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West Texas Intermediate (WTI) futures dipped by 65 cents to $61.20 a barrel as of midday trading in New York.
While Cushing, Oklahoma’s storage hub saw a minor build of 75,000 barrels, the overall tone of the report was viewed as supportive by analysts, highlighting robust export demand and domestic consumption.
