U.S. crude stocks hit lowest level since 1985

U.S. crude oil inventories declined for the tenth straight week in the period ended June 12, underscoring continued tightening in domestic oil supply. Total crude stocks, including commercial inventories and the Strategic Petroleum Reserve, fell by 17.2 million barrels to 758.5 million barrels. This took overall inventories to their lowest level since March 1985, marking a notable point in the long‑running drawdown of U.S. oil buffers.

Commercial crude inventories excluding the Strategic Petroleum Reserve also declined sharply. These stocks fell by 8.3 million barrels to 418.2 million barrels in the week, a larger draw than the 4.6 million‑barrel decrease expected in a Reuters poll. The bigger‑than‑forecast reduction points to stronger‑than‑anticipated withdrawals from available commercial supplies during the period.

Inventory levels at the Cushing, Oklahoma delivery hub continued to trend lower. Stocks there dropped by 1.6 million barrels to 20.03 million barrels, the lowest level since 2014 and described as near operational lows. Declines at Cushing are closely watched because the hub serves as the delivery point for U.S. crude futures and a key barometer of physical market tightness.

Beyond Cushing, product balances showed mixed movements. U.S. gasoline inventories fell by 906,000 barrels to 214.2 million barrels in the week ended June 12. In contrast, distillate stocks, which include diesel and heating oil, rose by 1.0 million barrels to 103.1 million barrels, indicating differing trends across major refined products.

Refinery operations strengthened over the week. U.S. refinery crude runs increased by 230,000 barrels per day, while refinery utilization rose to 96.7%. Higher throughput indicates strong processing activity, which can contribute to draws in crude inventories as refiners pull more barrels to meet product demand.

On the trade side, both net U.S. crude imports and exports eased. Changes in import and export flows can influence weekly stock movements, though the reported data highlight that domestic processing and hub draws were key contributors to the overall inventory decline during the period.

Oil futures initially extended gains after the release of the inventory report, reflecting the sharper‑than‑expected draw in crude stocks. The combination of lower total inventories, reduced levels at Cushing, and high refinery utilization provided signals of a tighter near‑term market.

However, prices later retreated as broader market factors came into focus. Traders weighed the impact of the U.S. inventory draws against developments around a possible U.S.-Iran deal and a warning from the International Energy Agency. Intraday, both Brent and WTI futures fell to their lowest levels since early March before recovering, leaving the overall price reaction to the report mixed.