Oil & Gas

Crude oil inventories in the United States declined by 2 million barrels for the week ending May 2, according to the latest U.S. Energy Information Administration (EIA) data, highlighting tightening supply despite volatile market conditions. This draw contrasts sharply with the American Petroleum Institute’s earlier report of a 4.49 million barrel build, reflecting conflicting signals in a market already unsettled by economic uncertainty and shifting supply dynamics. Ahead of the EIA’s release, oil prices were already on a downward trend, with Brent crude falling to $61.70 and West Texas Intermediate (WTI) to $58.72 per barrel both benchmarks seeing notable weekly losses. Meanwhile, gasoline inventories rose modestly by 200,000 barrels, and production climbed to 9.7 million barrels per day, slightly easing concerns after the previous week’s significant draw.

Distillate inventories, which include diesel and heating oil, dropped by 1.1 million barrels, with production ticking up to 4.7 million barrels daily. Inventories in this category now sit 13% below the five-year average, raising the possibility of price volatility as seasonal demand ramps up. Overall fuel consumption remains strong, with total petroleum product supply averaging 19.8 million barrels per day over the past month a 0.6% increase year-over-year. Demand for gasoline and distillates also rose by 3.5% and 3.1%, respectively. Despite healthy consumption and declining inventories, global economic pressures and OPEC+ developments continue to cloud the outlook, suggesting oil markets will remain highly reactive in the near term as the summer season and geopolitical factors evolve.