A large draw of more than 7 million barrels of commercial crude oil from U.S. stocks was more than offset by massive refined products builds of gasoline, diesel and heating oils.
The oil drawdown of 7.4 million barrels was bigger than projected, but so were the products inventory increases. Gasoline stocks rose by 4.8 million barrels as refineries churned out more fuel, and distillate fuel oil inventories surged by 8.9 million barrels to help meet the demand brought on by a nearly nationwide freeze. Distillates are used to make heating oils and diesel fuel.
However, the nation’s oil glut is largely gone now with the nation’s crude inventories at average levels for this time of year, according to the Energy Department. This comes as U.S. crude prices are hovering above $60 a barrel for the first time since 2015. Growing geopolitical unrest in the Middle East has boosted prices in addition to balancing global supply-and-demand levels.
The question is whether the depletion of the crude glut will lead to an oversupply of fuel and other petroleum products.
For now, gasoline stockpiles are only a little above average, but growing.
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