U.S. Strategic Petroleum Reserve Plunges to Lowest Level Since 1982

The U.S. Strategic Petroleum Reserve fell to 285.4 million barrels of crude oil in the week ending September 4, according to data released by the Energy Information Administration.

That was the reserve’s lowest recorded level since November 1982.

The latest figure marked a decline of 1.2 million barrels from the previous week, when the reserve contained 286.6 million barrels.

The weekly reduction extended a much larger contraction that has unfolded over the past 12 months.

One year earlier, the reserve held 405.2 million barrels of crude. That means its inventory has fallen by nearly 120 million barrels, or approximately 30%, during the year covered by the EIA figures.

The releases stem from a U.S. commitment to withdraw 172 million barrels from the reserve, according to Reuters.

The latest weekly data show how far strategic stocks have already fallen as that commitment has moved forward.

Commercial crude inventories also declined during the week ending September 4, although the decrease was smaller.

Those inventories, which exclude barrels held within the Strategic Petroleum Reserve, dropped by 0.4 million barrels to 424.1 million barrels.

Despite the weekly commercial inventory decline, the resulting total matched the five year average, according to the EIA.

The contrast was notable, with commercial stocks aligned with their average while the strategic reserve reached a level not seen in almost four decades.

Oil prices were elevated alongside the inventory reductions. West Texas Intermediate crude was priced at $92.69 per barrel on September 4, representing an increase of $8.12 from the previous week.

The September 4 price was also $30.47 per barrel higher than it had been one year earlier.

The figures showed a substantial increase across both the weekly and annual comparisons reported alongside the reserve data.

Motorists were also facing higher fuel costs. The national average retail price for regular gasoline reached $4.157 per gallon as of September 7, up $0.086 from the preceding week and $0.965 from the year ago level.

The reserve’s decline occurred during a broader stretch of elevated oil prices. Prices surged earlier in the week after Saudi Arabia shut down its East-West pipeline following drone attacks, sending both major crude benchmarks sharply higher.

Brent crude futures climbed above $108 per barrel, while West Texas Intermediate futures moved beyond $103 per barrel.

That advance marked the first time U.S. crude had traded above $100 since May.

Additional pressure followed the expiration of a 60 day ceasefire between the U.S. and Iran. The ceasefire expired in August without a permanent agreement, adding further upward pressure to oil markets as strategic inventories continued to contract.

U.S. refinery activity increased during the week ending September 4.

Refineries processed 17.6 million barrels per day, an increase of 91,000 barrels per day from the prior week, according to the EIA.

Those facilities operated at 97.8% capacity utilization during the same reporting period. The elevated utilization rate accompanied rising crude prices, declining commercial inventories and another reduction in the country’s strategic petroleum holdings.

Crude oil imports also moved higher during the week. Imports increased by 53,000 barrels per day to 6.8 million barrels per day, even as both strategic and commercial crude inventories registered declines.

Taken together, the EIA figures placed the reserve at 285.4 million barrels, commercial inventories at 424.1 million barrels and refinery processing at 17.6 million barrels per day.

The data captured a week of shrinking stocks, rising imports, heavy refinery utilization and sharply elevated crude prices.