US Crude Stocks Fall for Third Week as SPR Releases Accelerate

US commercial crude oil inventories fell 4.3 million barrels in the week ending May 8, the Energy Information Administration reported May 13, bringing stocks to 452.9 million barrels — their lowest since mid-March and the third consecutive weekly decline. Inventories now sit 0.3 percent below the five-year seasonal average. The draw is happening against a backdrop of aggressive SPR releases tied to IEA-coordinated action on Middle East supply disruptions. The Department of Energy announced May 11 it had awarded contracts to exchange roughly 53.3 million barrels from four sites — Bayou Choctaw, Bryan Mound, Big Hill and West Hackberry — following earlier exchange actions totalling around 80 million barrels. SPR stocks stood at 384.1 million barrels on May 8, down from 392.7 million the prior week and 399.7 million a year ago. The US contribution to the IEA's coordinated 400-million-barrel global release totals 172 million barrels under an exchange structure, meaning the original volume plus additional barrels must be returned at a later date. Between March 20 and April 24 alone, DOE released 17.5 million barrels, including 7.1 million in the week ending April 24 — the largest single-week release since October 2022. Goldman Sachs estimates Persian Gulf crude output has been curtailed by roughly 14.5 million barrels per day following the effective closure of the Strait of Hormuz, which handles about 20 percent of global oil and LNG flows. The IEA warned in May that global observed inventories declined at approximately 4 million barrels per day through March and April, and that markets will remain severely undersupplied through October even if the conflict ends soon. On the demand side, refinery activity picked up during the week ending May 8. Crude inputs averaged 16.4 million barrels per day, up 369,000 barrels per day from the prior week, with utilization at 91.7 percent of operable capacity. Gasoline production rose to 9.8 million barrels per day, yet motor gasoline inventories fell 4.1 million barrels and now sit five percent below the five-year average — a tightening that will draw attention as summer driving season approaches. Distillate inventories edged up 0.2 million barrels but remain nine percent below their five-year average. Propane/propylene was the outlier, jumping 3.6 million barrels to stand 55 percent above average. The key variable going forward is the pace of SPR return obligations. With 172 million barrels committed under exchange terms and Gulf producers facing forced output cuts as storage fills during the strait closure, the timeline for replenishment is deeply uncertain. OPEC+ production decisions compound that uncertainty. Wednesday's EIA print will show whether the commercial drawdown holds as summer demand builds.