US crude stocks fall on strong export, refining demand, EIA says, as U.S.-Israel war on Iran continues

• Gulf Coast inventories dropped by 6.7 million barrels as oil exports reached 5.9 million barrels per day, the second-highest level on record
• Gasoline stocks rose by 3.4 million barrels and distillate inventories increased by 1.5 million barrels, both defying analyst expectations for draws, signaling weaker post-Memorial Day demand
• Total product demand fell by 610,000 barrels per day to 20.94 million bpd, though analysts expect demand to strengthen in coming weeks

Summary

Key Developments

U.S. crude oil inventories fell by 8 million barrels to 433.7 million barrels for the week ending May 29, significantly exceeding analyst expectations of a 4 million-barrel draw, according to the Energy Information Administration (EIA). The decline reflects strong export and refining demand amid the ongoing U.S.-Israel war on Iran, now in its fourth month since beginning February 28.

Critical Data Points

• Gulf Coast drawdown: 6.7 million barrels, driven by oil exports reaching 5.9 million barrels per day—the second-highest level on record
• Total crude decline since war began: 63.9 million barrels
• Cushing, Oklahoma storage: Fell 583,000 barrels
• Net crude imports: Declined 249,000 barrels per day
• Refinery utilization: Rose 0.2 percentage points to 94.7%

Market Reaction

Oil futures rallied following the report:

• Brent crude: $97.52/barrel, up $1.52
• WTI crude: $95.34/barrel, up $1.58

Mixed Inventory Picture

Contrary to crude's bullish performance, refined products showed bearish signals:

• Gasoline stocks: Rose 3.4 million barrels to 215 million (expected: 0.5 million draw)
• Distillates: Increased 1.5 million barrels to 102.3 million (expected: 0.3 million drop)
• Total product demand: Fell 610,000 bpd to 20.94 million bpd post-Memorial Day

Market Implications

UBS analyst Giovanni Staunovo noted the surprising refined product builds reflect weaker post-holiday demand but expects improvement in coming weeks. The substantial crude inventory draws signal tight supply conditions driven by geopolitical tensions and robust export activity.