U.S. refiners continued operating at nearly full capacity last week, but diesel inventories kept falling, underscoring persistent tightness in the nation's fuel market.
Refineries operated at 96.5% of capacity during the week ending July 31, according to the U.S. Energy Information Administration's Weekly Petroleum Status Report. Even with refineries running at one of their highest utilization rates of the year, distillate fuel inventories, which include diesel, declined by 3.5 million barrels and remain 12% below the five-year seasonal average.
Gasoline inventories also fell by 1.6 million barrels, leaving stocks 7% below the five-year average. Meanwhile, U.S. commercial crude oil inventories increased by 2.5 million barrels to 407 million barrels, though they remain 6% below seasonal norms.
The report suggests refiners are continuing to maximize production to meet transportation fuel demand, particularly for diesel, even as inventories remain below historical levels. Over the past four weeks, distillate product supplied, a proxy for demand, averaged 1.8% above the same period last year, while total U.S. petroleum demand remained largely steady.
