U.S. crude inventories depleting at record pace on surging oil demand

Over the last four weeks total stockpiles, including the Strategic Petroleum Reserve, have fallen at a rate of 1.15 million barrels a day, marking the largest four-week decline on a rolling basis in Energy Information Administration Data going back to 1982.

Meanwhile, Nymex calendar spreads rallied Wednesday, with the September West Texas Intermediate futures contract rising to $1 a barrel premium over October for the second time this month, pointing to expectations for ongoing supply tightness through the summer.

The record rate of drawdowns underscore the strength of the U.S. oil demand recovery just ahead of a critical meeting between OPEC and its allies on Thursday to debate a potential output increase.

Record Drawdown

Americans are taking to the roads and skies at increasing numbers as the country emerges from months of lockdowns. To meet demand, oil refiners boosted crude processing to levels only seen before the pandemic. Earlier this month, California, America’s most populous state, re-opened its economy, while New York ended most of its curbs.

At the same time U.S. drillers have been slow to respond to the oil prices, which are up more than 50% so far this year. Domestic crude production is holding at roughly 15% below peak levels seen early last year.