U.S. Fuel Stocks Fall as Midwest Gasoline Reaches Seasonal Record Low

Oil futures reached session highs after U.S. fuel inventories declined, with gasoline and distillate stocks falling even as commercial crude supplies posted a modest increase for the week ended Sept. 25.

Gasoline inventories dropped by 1.684 million barrels, leaving nationwide stocks at their lowest level since November 2014. Midwest gasoline supplies also reached their lowest seasonal level on record. PADD 1B gasoline stocks fell by 1.422 million barrels.

Distillate inventories declined by 2.251 million barrels, with stockpiles falling across every U.S. region. Supplies remained at their lowest seasonal level on record, putting diesel inventories at the center of market attention.

Commercial crude inventories increased by 922,000 barrels. Stocks at the Cushing, Oklahoma, storage hub rose for a second consecutive week to 24 million barrels, the highest level since May.

The Strategic Petroleum Reserve declined by another 785,000 barrels. The drawdown is part of a U.S. Department of Energy program involving up to 172 million barrels from the reserve, which has reached its lowest level since 1982. The reserve's decline was detailed in an earlier report on its record-low level.

After the SPR withdrawal, the nationwide crude build amounted to about 137,000 barrels. Refinery utilization fell by 1.5 percentage points, while refinery crude inputs dropped by 554,000 barrels per day.

Crude imports decreased by 179,000 barrels per day, and domestic production rose by 16,000 barrels per day. U.S. crude exports rebounded to 1.5 million barrels per day.

Imports from Brazil climbed to nearly 500,000 barrels per day, the highest level for this time of year. Shipments from Canada rose to 3.4 million barrels per day.

Refinery crude processing fell by 1.3 million barrels per day over the past three weeks. The combination of lower processing and declining fuel inventories has focused attention on diesel and other refined-product supplies.