According to the EIA's Weekly Petroleum Status Report (WPSR) released this morning for the week ended July 24, U.S. commercial crude inventories posted their largest weekly draw in over two months, falling more than 7 MMbbl to less than 405 MMbbl. Total crude once accounting for SPR inventories currently sits at 712 MMbbl (yellow circle in chart below). This draw reduces commercial crude inventories to their lowest level since October 2018, as exceptionally strong refinery demand more than offset modest export growth. As discussed in this week's Crude Oil Billboard, the bulk of the draw occurred in PADD III, where inventories declined 6.5 MMbbl alongside a sharp increase in capacity utilization to above 100% as refiners continue to capitalize on near record-high crack spreads.
The inventory decline underscores how little buffer remains in the U.S. crude system. Cushing stocks fell below the widely watched 20 MMbbl threshold to just 18.6 MMbbl, their lowest level since August 2014, increasing the market's sensitivity to disruptions in inland crude logistics. At the same time, the Strategic Petroleum Reserve fell for an eighteenth consecutive week to its lowest level since 1983 after another 4 MMbbl draw. While the pace of SPR withdrawals has slowed, more than 108 MMbbl has now been released since the start of the conflict with Iran as part of the broader IEA-coordinated emergency stock release.
Although commercial crude inventories have fallen to their lowest level since 2018, the U.S. is far from running out of oil. Domestic production remains near record highs, imports are averaging near 6 MMb/d for the year, and more than 700 MMbbl of crude remains in commercial and strategic storage combined. The significance of today's inventory levels lies less in the absolute volume of oil available and more in the shrinking margin of safety. As inventories tighten and uncertainty of the duration of the War in Iran rises, the market becomes increasingly responsive to incremental changes in refinery demand, export flows, or supply disruptions, amplifying price volatility even when overall crude availability remains adequate.
