US Crude Inventories Plunge 8.6 Million Barrels as IEA Pledges to Release Over 100 Million More Barrels

US commercial crude oil inventories fell 8.557 million barrels for the week ended October 9, according to EIA data released Thursday, vastly exceeding the roughly 150,000-barrel build that markets had anticipated and nearly tripling the prior week's draw of 3.186 million barrels. The surprise draw sent US crude futures surging more than $2 to their highest level since September 21, with Brent futures also turning positive. Commercial stockpiles now stand at 415.6 million barrels, about 3% above the five-year seasonal average.

The headline crude draw masked a mixed picture across the petroleum complex. Gasoline inventories rose 3.518 million barrels against a forecast draw of around 900,000 barrels, while distillate stocks fell 2.527 million barrels, steeper than the expected 1.6-1.72 million barrel decline. Cushing, Oklahoma hub inventories built by 1.862 million barrels, more than four times the prior week's 444,000-barrel increase. Total US petroleum inventories, covering crude, the Strategic Petroleum Reserve, and refined products, fell 13.384 million barrels week-on-week to 1,506.999 million barrels. Crude imports fell 596,000 barrels per day and refinery utilization rose 0.8 percentage points.

Separately, the IEA Governing Board announced Thursday that its members will complete the release of approximately 100 million barrels still outstanding from the coordinated intervention launched in March, with the total volume to be released set to exceed the original 400 million barrel commitment. Around 330 million barrels have already been released. The IEA said specific plans are already in place to accelerate remaining volumes, including over 20 million barrels of diesel as soon as possible, and encouraged members with production and refining capacity to boost crude and refined product supply. The US had pushed for an additional 100 million barrel tranche beyond the March total, but the IEA statement offered only a vague commitment that the final aggregate would exceed 400 million barrels without specifying a new ceiling.

The US Strategic Petroleum Reserve is already at its lowest level since 1982 after Washington drew 172 million barrels as part of the March intervention. US natural gas storage saw a net injection of 67 Bcf for the week ended October 9, falling short of forecasts around 74-76 Bcf and well below the prior week's 85 Bcf build, signaling firm demand. US producer prices rose 1.3% in September from the prior month, the largest monthly gain since March 2022, with energy prices climbing 10.8%.