US Oil Stockpiles Fall 1.5M Barrels, Less Than Forecast
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
crude-oileiainventory
Fazen Markets Editorial Desk
Collective editorial team · methodology
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U.S. commercial crude oil inventories fell by 1.5 million barrels for the week ending May 23, 2026, data from the Energy Information Administration showed on May 27, 2026. The draw was smaller than the median analyst forecast for a decline of 2.3 million barrels. The reported inventory level of 459.7 million barrels pressured front-month West Texas Intermediate futures, which traded near $77.80 per barrel following the release.
Weekly inventory data is a primary gauge for physical oil market tightness. The last five weekly EIA reports have shown an average build of 1.8 million barrels, contrasting with typical seasonal draws for this period. The current macro backdrop features a strong U.S. dollar and Federal Reserve policy uncertainty, which dampen commodity demand.
The primary catalyst for the smaller-than-expected draw was a combination of weaker implied demand and ongoing releases from the Strategic Petroleum Reserve. Gasoline demand figures for the week remained below the five-year average for this period. Concurrently, the Department of Energy released 1.0 million barrels from the SPR as part of a congressionally mandated sale, adding supply to the commercial system.
This data arrives during the traditional start of the summer driving season in the United States. Market participants are scrutinizing consumption patterns for signs of economic resilience. The persistent inventory builds this spring have shifted the market narrative from supply constraints to demand concerns.
The EIA report provided several key data points. Crude stocks at the Cushing, Oklahoma delivery hub rose by 800,000 barrels to 35.9 million. Nationwide refinery utilization rates increased by 0.7 percentage points to 91.2% of capacity. Gasoline inventories decreased by 2.0 million barrels, while distillate fuel oil stocks increased by 1.6 million barrels.
Implied demand metrics showed mixed signals. Total product supplied, a proxy for consumption, averaged 20.1 million barrels per day over the last four weeks. This figure is 0.8% below the same period last year. Net U.S. crude imports averaged 6.4 million barrels per day, an increase of 540,000 barrels per day from the prior week.
Price action following the data was telling. WTI July futures initially dropped $0.85 to $77.45 before paring some losses. The price remains in a narrow $76-$80 range observed for most of May. The international benchmark Brent crude showed similar weakness, trading at $82.10, maintaining a $4.30 premium to WTI.
| Metric | Week Ended May 23 | Forecast | Prior Week (Revised) |
|---|---|---|---|
| Crude Inventory Change | -1.5M barrels | -2.3M barrels | +2.4M barrels |
| Cushing Stocks Change | +0.8M barrels | N/A | +1.1M barrels |
| Refinery Utilization | 91.2% | 90.8% | 90.5% |
The undersized draw reinforces a bearish outlook for crude prices in the near term. Integrated oil majors like ExxonMobil (XOM) and Chevron (CVX) face headwinds to upstream earnings, though their diversified downstream operations provide a hedge. Refining margins may see support from higher utilization rates, benefiting pure-play refiners like Marathon Petroleum (MPC) and Valero Energy (VLO).
A key counter-argument is that global supply risks, including persistent OPEC+ production cuts and geopolitical tensions in the Middle East, provide a price floor. However, the market's muted reaction to recent supply disruptions suggests these risks are currently priced in. The focus has shifted decisively to demand.
Positioning data from the Commodity Futures Trading Commission shows money managers reduced their net-long positions in WTI futures by 12% in the latest reporting period. Flow is moving towards short-dated put options, indicating traders are hedging against further downside. Physical traders are reportedly building storage positions, anticipating a contango market structure where future prices exceed spot prices.
The next EIA weekly petroleum status report is scheduled for release on June 3, 2026. Market consensus will focus on whether gasoline demand strengthens as the Memorial Day holiday passes. The OPEC+ Joint Ministerial Monitoring Committee is set to convene on June 4, though analysts expect the group to maintain its current production quotas.
Price levels to watch include the 50-day moving average for WTI near $78.50, which now acts as resistance. A sustained break below the May low of $76.20 could trigger technical selling toward the $74 support zone from April. The Brent-WTI spread above $4.30 will be monitored for signs of U.S. export competitiveness weakening.
Further releases from the U.S. Strategic Petroleum Reserve are scheduled throughout Q3 2026, totaling approximately 15 million barrels. These planned releases will continue to supplement commercial supply. The market will also watch for any revisions to demand forecasts from the International Energy Agency in its June monthly report.
The report showed a larger-than-expected draw in gasoline stocks of 2.0 million barrels, which is typically a bullish signal for pump prices. However, this was offset by tepid implied gasoline demand, which remains below seasonal norms. The mixed signals suggest near-term price stability at the pump, with any significant move likely contingent on actual driving activity data over the coming holiday weeks. Refinery output is running at high rates, ensuring ample supply.
Releases from the SPR are counted as additions to commercial crude oil supply. The 1.0 million barrel release last week directly offset what would have been a larger commercial inventory draw. The SPR currently holds 362 million barrels, its lowest level since the 1980s. Continued congressionally mandated sales are factored into market expectations, but they mechanically increase available supply and can cap price rallies driven by other geopolitical factors.
Over the past five years, U.S. crude inventories have, on average, declined by approximately 3.5 million barrels during the last full week of May as refineries ramp up to meet summer fuel demand. The 1.5 million barrel draw reported is less than half that historical average. This divergence highlights the current anomaly of sluggish demand growth despite solid economic indicators, a dynamic that has kept total commercial stocks above the five-year average for this period.
The smaller-than-forecast inventory draw underscores persistent demand weakness, keeping downward pressure on crude prices.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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