Analysis: EIA Sees Crude Demand Soar to Six-Year High


   Analysis: EIA Sees Crude Demand Soar to Six-Year High

   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Net inputs of crude oil at domestic refineries last week 
soared to their highest since 2019, U.S. Energy Information Administration data 
published Wednesday (7/29) showed. Record-high crack spreads had refiners run 
near maximum capacity, with the average crude processing rate jumping 271,000 
bpd to 17.34 million bpd in the week ended July 24.

   The growing disparity between a tightening global fuels market and 
better-supplied crude market propelled product cracks past their previous 
record highs reached in the early months of Russia's invasion of Ukraine in 
2022. At market close on Tuesday, the 3:2:1 crack spread vs WTI hit an all-time 
high $72.22 bbl.

   Refiners in the U.S. have against the backdrop of extremely high margins for 
months operated above typical seasonal norms. Over the past four weeks, they 
utilized 96.3% of operable capacity, compared to 94.9% in the same period in 
2025. Net crude oil inputs averaged 17.14 million bpd, up 212,000 bpd 
year-on-year, despite a 110,000 bpd drop in capacity.

   U.S. refiners have during the ongoing Hormuz crisis become a swing supplier 
of refined fuels to the global market. Gasoline, diesel and jet fuel exports 
have over the past months set new record highs. In contrast to their Asian 
counterparts, who were forced to slash runs by millions of bpd amid the sudden 
loss of their primary crude oil source, U.S. refiners were able to operate 
unhindered.

   Months of low global fuels production have considerably tightened the global 
market, as the supply-side impact of the Hormuz crisis was much more pronounced 
than the price-induced dip in refined fuels demand. Mounting war-induced 
refinery outages from the Middle East to Russia have worsened the supply 
tightness, catapulting refining margins to record highs.

   Domestic commercial crude oil inventories have between mid-April and late 
June dwindled rapidly amid sky-high exports, falling to their seasonally lowest 
in more than a decade. Now, the added pressure of soaring domestic demand, all 
while exports are still running more than 500,000 bpd above year-ago levels, is 
set to draw down stockpiles even more. The newest EIA data indicated commercial 
inventories fell 7.2 million bbl last week to 404.5 million bbl, down 5.2% 
year-on-year and 6.6% below the five-year seasonal average.

   The release of by now nearly 108 million bbl from the Strategic Petroleum 
reserve has since late March feathered what would have been an even steeper 
decline in inventories. Two thirds of this cushion are now gone, and another 
release on top of the originally planned 172 million bbl is unlikely, given 
that volumes in the SPR, currently at 307.7 million bbl, are already 
approaching minimum operational levels -- with 64 million bbl still to go.




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