US Pulled 7Mln Barrels From Crude Reserve Last Week In Record Draw - Energy Agency

The United States pulled a record 7 million barrels of crude from its Strategic Petroleum Reserve (SPR) last week, according to government data on Wednesday that showed unrelenting draws from the nation's oil reserve by the Biden administration in its bid to bridge an energy supply deficit and cool all-time highs in fuel prices

WASHINGTON (UrduPoint News / Sputnik - 11th May, 2022) The United States pulled a record 7 million barrels of crude from its Strategic Petroleum Reserve (SPR) last week, according to government data on Wednesday that showed unrelenting draws from the nation's oil reserve by the Biden administration in its bid to bridge an energy supply deficit and cool all-time highs in fuel prices.

The SPR's stockpile for the week ending May 6 stood at 543 million barrels from a previous 550 million, which was already the lowest reserve level in 20 years, the US Energy Information Administration (EIA) said in its Weekly Petroleum Status Report.

The EIA report, released each Wednesday, showed that the Biden administration has taken 3 million barrels on the average out of the SPR every week over the past two months to help meet domestic refiners' demand for crude.

Global oil supplies are estimated to be in a deficit of five to seven million barrels per day versus demand, largely due to Western sanctions against Russia one of the world's largest energy exporters. A surfeit in fuel consumption amid strong economic recovery from the two-year long coronavirus pandemic has also left the market in deficit.

The Biden administration did its first major SPR withdrawal in November as oil supplies began tightening amid an uptick in demand.

Last week's SPR draw was, however, more than double the weekly trend as the administration entered an era of accelerated reliance on the reserve amid average pump prices of gasoline standing at all-time highs of $4.37 per gallon versus the year-ago average of $2.99.

For May through July, the administration has scheduled a SPR release of 180 million barrels effectively one million barrels a day over 180 days.

The EIA report showed that as the SPR stockpile fell by 7 million barrels last week, the commercial crude inventory level rose by 8.5 million barrels.

To the casual observer, it might suggest that the crude leaving the reserve had gone directly into commercial inventories. The EIA, however, says there's a one-week lag in accounting between the two.

Notwithstanding the crude draw, consumption of fuel products remained strong last week, with gasoline inventories seeing a slide of 3.61 million barrels versus a forecast draw of 1.6 million barrels and the previous week's usage of 2.23 million barrels. Gasoline is America's premier automobile fuel product.

Stockpiles of distillates, which are refined into diesel for trucks, buses, trains and ships as well as fuel for jets, fell by 913,000 barrels last week versus forecasts for a draw of 1 million, after the previous week's consumption of 2.34 million.

Diesel has been the strongest growth component of the US oil complex for months, seeing virtually non-stop inventory declines since early January. As a result, pump prices of diesel have also hit record highs, averaging $5.55 a gallon versus the year-ago average of $3.13.

"The Biden administration is determined to use the SPR to the hilt to beat back the inflation in fuel. The reality is we aren't seeing much reduction in what Americans are paying at the pump," John Kilduff, partner at New York energy hedge Again Capital, said,

The price of crude oil itself has been volatile since the start of Russia's militarily operation in Ukraine, with the US West Texas Intermediate benchmark falling to as low as $98 last week from a March high of above $130. But the retail price of gasoline has remained stubbornly at or above $4 per gallon over the past two months, prompting the Biden administration to accuse energy firms of price-gouging at the pump.

From: Barani Krishnan - [email protected]

Subject: US Pulled 7Mln Barrels From Crude Reserve Last Week in Record Draw - Energy Agency EIA