Crude oil inventories dropped more than expected this week, posting the sixth straight weekly decline and the 16th weekly decline in the last 18 weeks.  According to the DoE, weekly inventories declined by 6.45 million barrels in the latest week compared to estimates for a decline of just 2.2 million barrels.  Over the last five weeks now, crude oil inventories have declined by 27.5 million barrels, which is the largest five-week decline since the beginning of 2014.  At current levels, crude oil stockpiles in the United States remain well above their historical averages of the last five years and going all the way back to 1983.  In fact, relative to averages since 1983, crude oil stockpiles are more than 165 million barrels (40%) above average.

At current levels, crude oil stockpiles in the United States remain well above their historical averages of the last five years and going all the way back to 1983.  In fact, relative to averages since 1983, crude oil stockpiles are more than 165 million barrels (40%) above average.  What is notable about the recent decline in stockpiles is that following the last several weeks of declines, crude oil inventories are now below where they were at this time last year, and at the very least that’s a moral victory.

While oil inventories saw a much larger than expected decline this week, gasoline stockpiles unexpectedly increased. As shown in the chart below, gasoline inventories increased by 3.4 million barrels this week compared to estimates for a decline of 1.5 million barrels.  With that increase, inventory levels are just below their levels from the same time last year, but still well above the historical average going back to 1990.

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