US crude oil stocks decreased by 7.1 MMBbl last week. Gasoline and distillate inventories increased by 8.3 MMBbl and 10.1 MMBbl respectively. Yesterday afternoon, API had reported a crude oil withdrawal of 7.4 MMBbl. Analysts had expected a much smaller crude oil withdrawal of 2.2 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted a build of 6.1 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below.

US production was estimated to be up 4 MBbl/d from last week per EIA’s estimate. Imports were down 984 MBbl/d last week to an average of 7.2 MMBbl/d. Refinery inputs averaged 16.7 MMBbl/d (132 MBbl/d more than last week), leading to a utilization rate of 92.0%. The main reason for the crude oil withdrawal was the sharply lower imports and higher refinery inputs. The petroleum stocks report may seem bullish at first glance, as the crude oil withdrawal was much larger than analyst expectations. However, the build in refined petroleum products more than offset this withdrawal and sent total petroleum inventories numbers climbing, leading to a bearish result. Crude oil prices remain largely unchanged this morning, with prompt month WTI prices up $0.05/Bbl, trading at $53.31/Bbl at the time of writing.

WTI prices have been trading in the $50-55/Bbl range for the past couple of weeks as the market is weighing the bullish proposed production cut from OPEC and non-OPEC producers vs. the bearish upside that mid-$50/Bbl crude prices provide for US production potential. In bullish news, a Reuters survey showed this morning that OPEC supply fell in December to 34.18 MMBbl/d from 34.38 MMBbl/d during the prior month. However, even at this lower production level, OPEC continues t...