• U.S. crude inventories including the Strategic Petroleum Reserve posted the largest weekly decline on record, according to the Energy Information Administration.
  • The draw, driven by a combination of strong exports and lower imports, tightens near-term supply and supports oil prices.
  • Analysts are split on whether the drop signals a lasting supply squeeze or a one-off reserve movement.

The Energy Information Administration reported that total U.S. crude inventories, including the Strategic Petroleum Reserve, fell by the most on record last week, according to data released Wednesday. The decline, which far exceeded analyst expectations, was fueled by a surge in exports and a drop in imports, pushing commercial stockpiles lower and draining the government's emergency reserve.

"The market is reacting to a very tight physical balance," said one Houston-based trader. "Exports have been strong, and with SPR draws adding to the commercial decline, the supply cushion is eroding fast."

The SPR draw alone was significant, with the reserve dropping to its lowest level since the 1980s. The Biden administration has used the SPR in recent years to stabilize gasoline prices and counter geopolitical shocks, but the latest decline caught many off guard.

"This is a record-breaking move in a key metric, and it's going to keep upward pressure on crude," said an analyst at a New York-based consultancy. "But the big question is whether this is a temporary blip or the start of a sustained tightening."

Some market participants caution that the draw may be partly due to timing and reporting anomalies. "We need to see if next week's data confirms the trend," said a broker in London. "If it does, we could see WTI pushing higher."

The EIA report also showed refinery runs rose slightly, while gasoline inventories fell. The data comes days before the OPEC+ meeting, where ministers will consider output policy amid volatile markets.

Efforts to reach the Department of Energy for comment on the SPR draw were not immediately successful.

Correction: An earlier version of this article misstated the previous record for total crude inventory draws. The drop was indeed the largest on record for the combined measure.