U.S. crude inventories fell sharply last week as refineries ramped up production to capitalize on higher fuel prices following renewed conflict with Iran, according to Financial Times.
Commercial crude stockpiles declined by 7.2 million barrels, while the Strategic Petroleum Reserve (SPR) dropped another 3.8 million barrels.
Refineries operated at 97% of capacity nationwide, with some Midwest facilities running at full capacity as exports to Asia and Europe increased.FT writes that the drawdown comes as renewed fighting between the U.S.
and Iran continues to disrupt oil shipments through the Strait of Hormuz, forcing the U.S. to help offset reduced Middle Eastern supplies.
Analysts warn that America is increasingly carrying the burden of stabilizing global oil markets."US crude inventories, both commercial and the SPR, have drawn down by nearly 20 per cent since early April. The US accounts for about 70 per cent of global onshore crude inventory draws over the past four months," said Matt Smith of Kpler.
"It has carried the burden of trying to keep oil prices in check over this period via SPR releases and higher exports, but stockpiles are rapidly depleting and this pace of draws cannot persist ad infinitum."The SPR has now fallen to 307.7 million barrels, its lowest level in more than 40 years.
While still above its estimated operational minimum of 180 million to 200 million barrels, analysts warn that continued depletion leaves the U.S. increasingly exposed to future supply shocks.
Commodity Context founder Rory Johnston described current crude and gasoline inventories as "precariously low."