The United States continues to experience a notable decline in crude oil inventories, with significant impacts on West Texas Intermediate (WTI) crude oil prices. According to the American Petroleum Institute (API), crude oil stocks fell by 2.8 million barrels in the week ending May 22, following an even larger drop of 9.1 million barrels the previous week. Despite these recent declines, total crude inventories have increased by 22 million barrels so far this year. This contrasting trend reflects ongoing market dynamics influenced by production rates and strategic reserve adjustments.
The Strategic Petroleum Reserve (SPR) has been a key factor in the current inventory shifts. During the week ending May 22, the SPR saw a reduction of 9.1 million barrels, bringing its total holdings down to 365.1 million barrels. This level marks the lowest since April 2024 and is significantly below the reserve’s maximum capacity by about 360 million barrels. The continued drawdown from the SPR aims to ease upward pressure on oil prices by increasing available supply in the market.
Production levels have shown a slight decrease, with the Energy Information Administration (EIA) reporting US crude output at 13.702 million barrels per day for the week ending May 15. This represents a small decline from 13.710 million barrels per day recorded the previous week but remains higher than last year’s output by approximately 310,000 barrels per day. The combination of fluctuating production and strategic reserve releases plays a crucial role in balancing supply and demand.
Market reactions have been swift, with WTI crude oil prices dropping sharply amid these developments. On Wednesday, before official data release, WTI was trading down by $4.23 per barrel, a 4.51% decrease, settling at $89.66 per barrel. This marks a roughly $14.50 decline compared to the previous Tuesday’s levels. Similarly, Brent crude prices fell by over $4 on the day to $95.46 per barrel, reflecting broader concerns about supply and demand balance.
In addition to crude oil stocks, gasoline inventories also declined by 3.199 million barrels during the same week, following a prior drop of 5.8 million barrels. These gasoline supplies are currently about 5% below their five-year average for this time of year, signaling tighter conditions ahead of peak summer driving season. Distillate inventories experienced a modest rise of 1.1 million barrels after falling by one million barrels in the previous week but remain around 9% below their five-year average.
Cushing, Oklahoma — the delivery hub for WTI crude futures — saw inventory levels fall by nearly 2.9 million barrels in the reporting period after a decline of 1.4 million barrels the prior week. This continued drawdown at Cushing contributes directly to price movements in WTI contracts and indicates tightening physical supply at key storage points.
Overall, these inventory trends highlight ongoing volatility in the US oil market amid efforts to stabilize prices through strategic reserve management and production adjustments. While some market participants remain optimistic about a quick resolution to supply imbalances, current data suggests that both crude and gasoline supplies are tightening, which could influence price direction in the near term.
