US Oil Reserves Thin as Global Prices Surge

The American Petroleum Institute reports a 2.6 million barrel decline in commercial crude inventories for the week ending August 28, a sharp reversal from the previous week's 4.2 million barrel build. Over the last twenty weeks, commercial stocks excluding the SPR have shed over 48 million barrels. Despite these withdrawals, total US inventories remain 3.1 million barrels higher than at the start of the year.

Energy markets are reacting to the tightening supply outlook. Brent crude climbed nearly 6% to $95.28 per barrel on Tuesday, while WTI followed suit, rising to $90.84. These price spikes reflect a broader market anxiety, as the SPR now sits 445 million barrels below its maximum capacity. Meanwhile, production levels continue to climb, reaching 13.843 million barrels per day, an increase of 461,000 barrels from a year ago.

Refined products show a mixed landscape. Gasoline inventories ticked up by 300,000 barrels, providing a minor reprieve from levels already 6% below the five-year average. Conversely, distillate stocks fell by 300,000 barrels, deepening a deficit that stood at 14% below the five-year average prior to the latest reporting period. At the Cushing delivery hub, inventories rose by 200,000 barrels, marking the second consecutive week of growth for the key WTI storage site.