U.S. Energy Market Update: Crude and Fuel Inventories Decline Amid Rising Nigerian Imports

The U.S. energy sector experienced notable shifts in the week ending May 23, 2025, as reported by the Energy Information Administration (EIA). Crude oil and fuel inventories across the board saw declines, while crude imports from Nigeria surged to their highest level in nearly six years, driven by an outage at Nigeria’s 650,000 bpd Dangote refinery from April 7 to May 11.

Inventory Declines and Market Dynamics

U.S. crude inventories dropped by 2.8 million barrels to 440.4 million barrels, defying analysts’ expectations of a 118,000-barrel increase, according to a Reuters poll. This draw was partly fueled by a significant rise in U.S. crude exports, which increased by 794,000 barrels per day (bpd) to 4.3 million bpd. “Higher U.S. crude exports resulted in a crude draw,” noted Giovanni Staunovo, an analyst at UBS, describing the EIA report as supportive of market dynamics.

Gasoline and distillate stockpiles also saw reductions. Gasoline inventories fell by 2.4 million barrels to 223.1 million barrels, exceeding expectations of a 527,000-barrel draw. Distillate stockpiles, including diesel and heating oil, decreased by 724,000 barrels to 103.4 million barrels, against forecasts of a 481,000-barrel rise. Notably, U.S. distillate fuel oil stocks hit their lowest level since April 2005, with Midwest inventories reaching their lowest since November 2017.

Demand for gasoline and diesel surged ahead of the Memorial Day holiday, with gasoline supplied—a proxy for demand—climbing to 9.45 million bpd from 8.64 million bpd the previous week. “Pumping stations demanding more gasoline and diesel last week ahead of the Memorial Day resulted in higher implied demand and draws for gasoline and distillates,” Staunovo added.

Nigerian Imports and Refinery Operations

Crude imports from Nigeria rose sharply by 358,000 bpd to 364,000 bpd, marking the highest import volume from the African nation since October 2019. This increase coincided with an unplanned outage at Nigeria’s Dangote refinery, which likely redirected crude flows to the U.S. market. Meanwhile, net U.S. crude imports fell by 532,000 bpd to 2.05 million bpd, reflecting a complex interplay of global supply dynamics.

U.S. refinery operations saw a slight downturn, with crude runs decreasing by 162,000 bpd and utilization rates dropping by 0.5 percentage points to 90.2%. At the Cushing, Oklahoma, delivery hub, crude stocks rose modestly by 75,000 barrels, providing a counterpoint to the broader inventory declines.

Oil Price Movements

Oil prices reacted modestly to the EIA’s report of unexpected inventory draws but remained in negative territory. Global Brent crude futures fell by 56 cents to $64.34 per barrel, while U.S. West Texas Intermediate (WTI) futures declined by 65 cents to $61.20 per barrel as of 12:11 p.m. EDT (1611 GMT) on May 29, 2025.

Conclusion

The EIA’s latest data underscores a dynamic U.S. energy market, with declining crude and fuel inventories driven by robust export activity and heightened holiday demand. The surge in Nigerian crude imports highlights global supply chain adjustments, while soft refinery activity and low distillate stocks signal ongoing challenges. As oil prices hover in negative territory, market participants will continue to monitor these trends for insights into future energy market movements.

Reference: OrientalNews Reuters