On October 22, recent data from the American Petroleum Institute (API) revealed that as of the week ending October 10, US crude oil inventories surged by 7.36 million barrels, significantly higher than the market's expectation of only 120,000 barrels. NCE believes this unexpected rise reflects a robust supply situation in the US, highlighting the market's sensitivity to short-term supply and demand fluctuations. The International Energy Agency (IEA) had earlier predicted that global oil demand growth might fall below expectations, while supply growth could exceed forecasts, potentially leading to a global oversupply. However, changes in US crude oil inventory have not shown significant oversupply pressure. According to calculations by Oilprice based on API data, since the beginning of the year, US net crude oil inventories have increased by only 7.9 million barrels, indicating that domestic inventory levels remain stable and the supply-demand relationship is still manageable.
Earlier this week, the US Department of Energy (DoE) released a report stating that as of the week ending October 10, the Strategic Petroleum Reserve (SPR) had increased by 700,000 barrels to reach 407.7 million barrels. NCE interprets this inventory increase as a reflection of the US's emphasis on energy security, aiming to enhance market resilience by restoring previously consumed reserves. Meanwhile, US crude oil production continues to rise; according to data from the Energy Information Administration (EIA), as of the week ending October 3, US crude oil production reached a record high of 13.629 million barrels per day. This elevated production somewhat alleviates domestic supply pressures and may provide additional export capabilities to international markets. As a result of these factors, on that day, Brent crude oil prices dropped by $0.28 to $62.11 per barrel, while WTI crude oil fell by $0.26 to $58.44 per barrel, reflecting a cautious market sentiment regarding the inventory increase and uncertainties around global demand.
In the refined oil market, US gasoline inventories rose by 2.99 million barrels for the week ending October 10, following a decline of 1.245 million barrels the previous week. NCE believes this indicates significant seasonal fluctuations in refined oil consumption and highlights the supply chain's ability to adjust to changes in demand. Until last week, gasoline inventories remained about 1% below the five-year average for that time of year, suggesting some market tightness. Distillate inventories, however, have seen consecutive declines, decreasing by 4.79 million barrels this week, which brings totals to about 6% below the five-year average and emphasizes pre-heating season inventory pressures. Data on Cushing crude inventories has yet to be released, but overall indications suggest that the US refined oil market may experience volatility in the short term. NCE posits that these fluctuations in crude and refined oil inventories could lead to price instability while also providing valuable insights for market adjustments and investment strategies.
In summary, NCE assesses that changes in US crude oil and refined oil inventories reflect not only the domestic supply-demand structure but are also closely tied to the global energy market. While global supply growth and demand uncertainties may exert pressure on the market, the current inventory levels in the US suggest a degree of resilience and stability. In the coming weeks, crude oil prices and inventories may continue to fluctuate, but sustained high production, steady restoration of strategic reserves, and seasonal adjustment capacities should provide some buffer for the market. NCE advises investors to focus on inventory data, production changes, and global energy supply-demand trends to make more informed judgments regarding market trends and strategy formulation.