Crude oil plummeted as US Energy Secretary Jennifer Granholm warned lawmakers that replenishing strategic oil inventories would be “difficult” this year, fuelling speculation that the US government would only start buying at reduced prices. Russia’s abundant crude supplies weighed on prices as well, because the country’s previously expected decline in oil production will come from a larger base of output than previously suggested. Furthermore, even after Treasury Secretary Janet Yellen declared that authorities are prepared to take extra actions to stabilize US institutions, investors continue to avoid risky assets.
According to the Energy Information Administration, supplies in the United States surprisingly surged last week to their highest level in almost two years, while gasoline and distillate inventories decreased. Crude inventories rose by 1.1 million barrels in the week ended March 17, hitting 481.2 million barrels, the highest level since May 20, 2021. According to the data, oil inventories have been steadily increasing since mid-December. Last week, oil stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, according to the EIA. Last week, refinery crude runs fell by 22,000 barrels per day (bpd), while refinery utilization rates rose by 0.4 percentage points. The EIA said that gasoline stocks fell by 6.4 million barrels to 229.6 million barrels, above estimates of a 1.7 million-barrel drop. Distillate inventories, which include diesel and , fell by 3.3 million barrels in the week to 116.4 million barrels, contrary to expectations for a 1.5 million-barrel drop.