US crude draw and big road fuel stock builds weigh on Brent

Swelling gasoline and distillate inventories have hinted at a slowdown in US fuel demand and added some downward pressure on Brent since weekly data was released by the Energy Information Administration (EIA) today.

PHOTO: A storage facility for oil prior to being transported for refining and distribution for energy consumption throughout the United States. Getty Images

The week to 31 December saw a huge build in gasoline inventories with 10.13 million bbls added to a total of 232.79 million bbls in storage – the most since July.

Distillate stocks added considerable weight, too, rising by 4.42 million bbls to a nine-week high of 126.85 million bbls.

Crude inventories shed 2.14 million bbls and fell to their lowest since mid-September, when offshore production was crippled after Hurricane Ida ripped through the Gulf of Mexico.

US refineries have been processing crude with high runs since production started normalising from November. Refinery utilisation kept roughly steady at 89.6-89.8% of operable capacity through December.

API figures from yesterday indicated a bigger 6.43-million bbl crude draw and helped Brent higher as it overshot analyst expectations.

The EIA’s official figures sent Brent just below $81/bbl in the minutes after the data was released at 15.30 GMT today. Front-month Brent had previously traded above that mark and at its highest since Omicron fears triggered a selloff in late November.

By 16.00 GMT, Brent had bounced back above $81/bbl again, suggesting a limited price impact from the latest inventory data.