Crude Inventories Continue Decline as Refiners Ramp Up for Summer Demand

Based on data from the EIA’s Weekly Petroleum Status Report (WPSR) for the week ended June 5, strong refinery demand contributed to the need for a seventh consecutive commercial crude inventory draw. Stocks fell over 7 MMbbl to their lowest level since mid-February, and Cushing inventories dropped to their lowest level since December. Although refinery input increased by a modest 81 Mb/d to just under 17 MMb/d (purple circle in graph below), refinery utilization rose to 95.3%, the highest level since January, as refiners continued running hard ahead of peak summer demand. While outages at refineries in some PADDs weighed on runs, the return of all units at PBF's Martinez refinery and stronger operating rates elsewhere more than offset those losses. 

As discussed in RBN's Crude Oil Billboard, product balances remain a key incentive for sustained refinery activity. While gasoline inventories have begun to rebuild following an extended drawdown, distillate inventories remain exceptionally tight and are sitting at their lowest seasonal levels in decades. That tightness continues to support middle-distillate margins and encourages refiners to maintain elevated run rates to capitalize on overall healthy refining economics.