• US crude oil stocks in the Strategic Petroleum Reserve (SPR) fell to their lowest level since August 2023, according to the latest EIA data.
  • The draw highlights ongoing tightening of domestic crude supplies, with potential upward pressure on oil prices.
  • Market participants are watching for further releases or policy shifts that could affect inventory levels.

The latest weekly data from the Energy Information Administration reveals a sharp decline in US crude oil inventories held in the Strategic Petroleum Reserve, with stocks falling to levels not seen since August 2023. The draw underscores a period of tightening domestic crude supplies, driven by a combination of factors including sustained refinery runs, reduced imports, and continued releases from the SPR.

According to people familiar with the matter, the decline in SPR stocks comes as the Biden administration has been managing the reserve amid geopolitical tensions and efforts to stabilize fuel prices. The latest figures show a decrease of nearly 1.5 million barrels from the prior week, bringing total SPR crude oil holdings to roughly 345 million barrels.

“The SPR is a critical buffer, and these draws are indicative of a market that remains tight despite record US production,” said an analyst at a major energy consultancy, who asked not to be named due to firm policy. “Without a replenishment strategy, the reserve risks becoming less effective as a tool for emergency response.”

The decline in SPR stocks coincides with stronger refinery utilization rates, which averaged over 92% of capacity in the latest week, according to the EIA. Imports of crude oil have also lagged, averaging just 5.8 million barrels per day, well below the seasonal average. Exports, meanwhile, have remained robust, further straining domestic inventories.

Industry observers note that the inventory draw could provide support for crude prices, which have been volatile in recent weeks. West Texas Intermediate crude futures were trading near $78 per barrel on Friday, up about 2% from the previous session, as traders digested the latest supply data.

“If this trend continues, we could see prices push higher, especially if there’s any supply disruption from OPEC+ or geopolitical events,” said a portfolio manager at a Houston-based hedge fund. “The SPR draw adds to the bullish sentiment.”

However, some analysts caution that the declines may be temporary. The EIA data also showed a modest increase in commercial crude inventories, suggesting that the overall supply picture is not uniformly tight. Additionally, the Biden administration has signaled an interest in eventually refilling the SPR when prices are lower, though no concrete plans have been announced.

A spokesperson for the Department of Energy declined to comment on specific inventory levels but reiterated the administration’s commitment to maintaining the SPR as a strategic asset. Attempts to reach the EIA for further elaboration were unsuccessful.

Looking ahead, market participants will be closely watching next week’s EIA report for signs of whether the draw is accelerating or beginning to stabilize. The outcome could influence near-term trading strategies and policy discussions around energy security.