WTI oil gained ground as traders focused on geopolitical developments and reacted to the EIA Weekly Petroleum Status Report.
According to Iran’s Islamic Revolutionary Guard Corps, the country has reached a revenue-sharing deal with Oman on the Strait of Hormuz. It should be noted that a deal with Oman does not mean that the Strait of Hormuz would be fully reopened. U.S. has always been against any fees in the Strait of Hormuz.
The EIA report indicated that crude inventories increased by +0.1 million barrels, compared to analyst forecast of +0.6 million barrels. At current levels, crude inventories are 1% above the five-year average for this time of the year.
Total motor gasoline inventories declined by -2.5 million barrels, compared to analyst consensus of -0.7 million barrels. Distillate fuel inventories decreased by -2.2 million barrels from the previous week.
U.S. crude oil imports declined by -435,000 bpd from the previous week, averaging 6.2 million bpd. Over the past four weeks, crude oil imports averaged 6.6 million bpd.
Strategic Petroleum Reserve decreased from 293.4 million barrels to 289.7 million barrels. U.S. continues to sell oil from strategic reserves as the Strait of Hormuz is de-facto blocked. It should be noted that Strategic Petroleum Reserve has declined to levels that were last seen back in 1982.