US Crude Inventories Fall More Than Expected

US crude oil inventories declined in the week ended October 23, while distillate stockpiles also fell and gasoline inventories increased, according to data released Wednesday by the Energy Information Administration (EIA).

Crude stocks dropped by 1.9 million barrels to 410.6 million barrels, compared with analysts’ expectations for an increase of 15,000 barrels. Inventories at Cushing, Oklahoma, the delivery hub for US crude futures, fell by 624,000 barrels.

Gulf Coast crude inventories also declined to their lowest level since December 2024, highlighting tighter supplies in a key US oil-producing and export region.

Oil futures maintained their gains following the report. Brent crude traded at $115.66 per barrel, up $1.78, while US West Texas Intermediate rose $2.48 to $102.38.

Higher Exports Contribute to Falling Crude Stocks

US net crude imports fell by 796,000 barrels per day during the week, while crude exports increased by 1.4 million barrels per day to 4.85 million barrels per day, according to the EIA.

The combination of lower net imports and higher reported exports contributed to the decline in domestic inventories.

However, the export figures drew scrutiny from ship-tracking firm Kpler. Its lead oil analyst, Matt Smith, said observed crude loadings were approximately 1 million barrels per day below the EIA’s reported export figure, raising questions about other elements of the supply-and-demand balance.

The discrepancy introduces uncertainty into the interpretation of the weekly inventory report, particularly regarding the extent to which exports explain the reduction in US crude stocks.

Distillate Demand Strengthens as Gasoline Demand Falls

The data showed contrasting trends across refined petroleum products.

Distillate fuel demand increased by 475,000 barrels per day to 4.21 million barrels per day, while gasoline demand declined by 622,000 barrels per day to 8.358 million barrels per day.

Total US petroleum products supplied, an indicator of demand, fell by 1.022 million barrels per day to 20.21 million barrels per day.

Gasoline inventories increased by 3.9 million barrels to 209.2 million barrels, compared with analysts’ expectations for a decline of 900,000 barrels. The increase was consistent with the reported reduction in implied gasoline demand.

Despite the nationwide inventory increase, gasoline stockpiles in the Midwest remained at record lows, indicating that regional supply conditions differed from the national picture.

Diesel Supply Concerns Persist

Falling distillate inventories and stronger demand added to concerns about diesel availability and pricing. David Russell, global head of market strategy at TradeStation, said declining distillate stocks suggested diesel inventories remained well below seasonal norms, limiting the prospect of near-term price relief.

He also noted that slower withdrawals from the US Strategic Petroleum Reserve suggested a smaller buffer against further supply disruptions.

These conditions leave the refined fuels market sensitive to changes in demand, exports and refinery operations, even as gasoline inventories increase.

What Investors Should Watch Next

Investors will monitor subsequent EIA reports for confirmation of the crude inventory trend and further evidence about export volumes. The discrepancy between reported exports and observed vessel loadings makes the interpretation of weekly supply data particularly important.

Distillate stock levels, diesel demand and regional gasoline inventories will also remain relevant to near-term fuel prices. Continued declines in crude and distillate inventories could support oil prices, while weaker gasoline demand and rising stocks may point to a more uneven demand outlook across petroleum products.