US crude oil stockpiles hit lowest levels since early 2022 Crude oil inventories have hit their lowest levels in 2 1/2 years, new data from the Energy Information Administration show.
Last week, stockpiles excluding the Strategic Petroleum Reserve dropped by around 4.5 million barrels to 413 million barrels, according to the Wall Street Journal. These levels are around 5% below the average for this time of year and are the lowest since March 2022, when inventories dropped to around 410 million barrels.
Follow us on Apple News
It is the second week in a row that stockpiles have fallen by more than what had been predicted. Ahead of the end of last week, analysts told the Wall Street Journal they estimated inventories would drop by only 800,000 barrels.
The week before, ending on Sept. 13, crude inventories in the United States had dropped by around 1.6 million barrels — what had been the lowest levels all year.
While inventory lows were seen across the country, stocks at the Cushing, Oklahoma, delivery hub actually rose, per Reuters. The EIA said it increased by roughly 116,000 barrels, the hub’s first increase since August. Experts had been growing concerned about the low levels in Oklahoma, which is estimated to have tank bottoms at at around 20 million barrels.
“The trend of falling supplies is getting too big to ignore. We hear how bad demand can be and have mixed signals” Phil Flynn, a Price Futures Group analyst, told Reuters. “The weakness of demand doesn’t fit with this falling inventory situation.”
Following the news of the stock drops, oil prices also declined on Wednesday. Just before 3 p.m., Brent crude was priced at around $73.48 a barrel, down roughly $1.69. WTI crude was also down $1.87 to $69.69 a barrel.
U.S. oil production and imports have dramatically fallen in recent weeks, by around 100,000 and 545,000 barrels a day, respectively. Some of the fall-offs can be attributed to widespread shut-ins of crude oil and natural gas production in the Gulf of Mexico earlier this month due to Hurricane Francine.
More output has been halted in response to Hurricane Helene, which is expected to make landfall later this week. As of Wednesday, around 29% of crude oil and 17% of natural gas production was shut in, according to the Bureau of Safety and Environmental Enforcement.
As concerns about dropping stocks grow, the Federal Reserve Bank of Dallas revealed in a Wednesday survey that more shale oil and gas executives are converting to electric rigs and fracking.
The move is aimed at lowering diesel emissions and pollution during production. However, some are facing barriers with the grid and costs, according to Reuters. The recent survey found that only a fifth of oil and gas executives have fully switched to electric-powered drilling rigs and fracking. Around 29% of respondents said the biggest hurdle they face with electrifying operations has been uncertain access to the grid in the future.