Title: U.S. Crude Oil Inventories Unexpectedly Rise by 1.934 Million Barrels, Topping Forecasts
Author credit: Original reporting by FXStreet
The U.S. Energy Information Administration (EIA) published its latest weekly petroleum status report on Tuesday, December 31, 2025, revealing that crude oil stockpiles surged by 1.934 million barrels for the week ending December 27. This figure came in significantly higher than both market expectations and recent trends, surprising analysts who had anticipated a moderate decrease in inventories.
According to the FXStreet article, analysts had largely forecast a drawdown in crude stockpiles of around 2 million barrels. The actual increase, therefore, reflects a notable deviation from consensus forecasts and immediately impacted commodity and currency markets, including movements in West Texas Intermediate (WTI) crude futures and the U.S. Dollar Index (DXY).
Key Highlights from EIA’s Report:
– Crude oil inventories rose by 1.934 million barrels (mb) for the week ending December 27
– Market expectations had forecast a decline of approximately 2 mb
– Total U.S. commercial crude oil inventories now sit at approximately 441.4 million barrels, which is just slightly below the five-year average for this time of year
– Gasoline inventories increased by 2.5 million barrels
– Distillate fuel inventories declined by 1.6 million barrels
– Refinery utilization rate fell to 91.7 percent, down by nearly 1 percent from the prior week
– U.S. crude oil imports averaged 6.6 million barrels per day, an increase of 300,000 barrels per day from the previous week
Understanding the Inventory Increase
In the context of crude markets, inventory changes can offer significant insights for traders. A larger-than-expected build in oil inventories typically signals either weaker demand or stronger supply, indicating a potential bearish outlook on prices. In this week’s report, the unexpected build suggests that either refineries processed less crude (hence buying less oil) or that there was a temporary mismatch between imports and domestic production.
Refinery utilization dropped marginally to 91.7 percent, indicating that plants were operating below their full capacities. This drop is typical for this time of year as some facilities scale back operations for maintenance or due to seasonality in demand, especially around the turn of the year when transportation fuel usage generally slows.
Breakdown of Petroleum Products:
In addition to crude, the EIA’s report provided updates on other major petroleum product inventories which are critical to understanding the broader fuel supply landscape.
1. Gasoline:
– Inventories rose by 2.5 million barrels
– Gasoline demand typically surges during summer months and falls back in winter
– Current levels are in line with seasonal expectations
– Production of finished motor gasoline fell slightly for the week
2. Distillates (includes diesel and heating oil):
– Inventories fell by 1.6 million barrels
– The decline aligns with seasonal heating demands in northern states
– Distillate fuel production averaged 4.9 million barrels per day, maintaining strong output
Why Inventories Matter for Oil Prices
Crude oil prices are influenced by a wide range of factors, and weekly stockpile data from the EIA is among the most watched indicators for near-term pricing movements. A larger-than-expected drawdown usually supports bullish price action, signaling stronger demand, tighter supply, or both. Conversely, a surprise inventory build, as seen this week, exerts downward pressure on prices.
Following the release, WTI crude futures experienced minor selling pressure, temporarily dipping below $75.50 per barrel before stabilizing. Brent crude, the global benchmark, exhibited a similar reaction, trading around $79.70 in later sessions.
Currency Market Impact
The U.S. Dollar Index (DXY) saw some movement following the release of the inventory
Read more on USD/CAD trading.