US DATA: Cushing leads weekly crude storage decline - API

Quantum Commodity Intelligence – US crude oil stocks posted a slightly larger-than-expected decline for the week ending 26 January, while refined products also registered a net decline, according to data released late Tuesday by the American Petroleum Institute.

The latest API numbers revealed a 2.5 million barrel decline in crude inventories, beating expectations for a 1 million barrel decline, while Cushing posted a fourth weekly drop.

The key Cushing storage hub, the delivery point for the NYMEX WTI futures contract, dropped another 2 million barrels, extending the January decline, which saw inventories drop from around 35 million barrels at the start of the year to around the 28-million-barrel mark.

Meanwhile, gasoline inventories edged up 600,000, while distillates dropped by 2.1 million barrels for an overall net decline of 3.9 million barrels.

The Strategic Petroleum Reserve added 900,000 barrels as the low-scale buyback program continued after the Department of Energy released 180 million barrels from the SPR in 2022. US restocking is expected to slow after the DOE said logistics will limit SPR rebuilding to 3 million barrels per month.

US oil production and refining capacity were hit this month by winter storms, which analysts said will likely distort data during January.

Meanwhile, the 3-2-1 crack spread, a measure of US refining profitability against gasoline and heating oil margins, was around $25/b based on Mar24 futures contracts early Wednesday, little changed on the week with products largely tracing crude.

The weekly API report serves as a forerunner to the closely watched Energy Information Administration Weekly Petroleum Status Report, which will be published later Wednesday.