Gasoline, diesel and jet fuel stocks at historically low levels

US crude oil prices have fallen more than $2 per barrel today after the US Energy Information Administration (EIA) reported a 17-million-barrel build in commercial crude oil stocks, a figure well beyond industry expectations and the largest weekly increase in recent memory.

The stock build reflects a domestic oil market that is lengthening as the Strategic Petroleum Reserve release program runs its course and exports ease, even as geopolitical risk from the Middle East remains elevated. The more significant story in this week’s data, however, is in refined products.

Gasoline

Gasoline, diesel and jet fuel stocks drew in the US, and Europe’s Amsterdam-Rotterdam-Antwerp (ARA) hub recorded steep gasoline draws, leaving product inventories at historically low levels on both sides of the Atlantic.

Here is Rystad Energy’s market update from Susan Bell, SVP, commodity markets, oil:

“The magnitude of this drop in crude prices is beyond what the market was positioned for and it is sending a clear bearish signal on crude, but that is only part of the picture.

Gasoline, jet fuel and middle distillate stocks drew in the US this week, and Europe’s ARA hub saw steep gasoline draws too, while jet fuel and gasoil there stabilized.

US and ARA product stocks are at historic lows. That is keeping product crack spreads, the premium that refiners earn over the cost of crude, very strong even as crude itself softens.

What began as a Middle East crude oil supply crisis is turning into a global refined product supply crisis. The consumer-facing impact is showing up at the pump and at the airport, and that is where the pressure is going to build from here.”

A large crude stock build masks a tightening product market

US commercial crude oil stocks built 2.48 million barrels in week 31, according to the EIA, and are forecast to increase by a further 2.15 million barrels in week 32. The weekly build reflects imports rising 140,000 barrels per day (bpd) more than expected, while refinery throughput fell 105,000 bpd more than anticipated. US production is holding steady at 13.8 million bpd, supported by high refinery margins that are keeping utilization rates elevated at 96.5% of operable capacity. US refinery throughput is expected to remain above 17 million bpd through late August.

The crude build is also a function of the SPR release cycle winding down. The US Strategic Petroleum Reserve stood at 298.7 million barrels as of 7 August, with the government drawing at an average rate of 870,000 bpd last week, up from 406,000 bpd the prior week. Release 2 of the 2026 release program will continue through August at around 700,000 bpd, with the final contract, Release 3 at 500,000 barrels, expected to occur in September. Once that program completes, the volume of crude available for export will fall, which will affect the US crude balance in the months ahead.

Product stocks are at historic lows

The ARA product stocks chart tells a striking story. Gasoil stocks are running at around 75% of their 2026 opening inventory level. Gasoline has fallen to roughly 63% of opening inventory. Jet fuel is the most depleted, sitting at approximately 58% of the level it started the year at, having declined almost continuously since January. The draws reflect the structural tightening of refined product supply that follows from the broader Middle East disruption: refineries in Europe and Asia have been processing less Gulf crude, leading to lower product output at a time when summer demand remains firm.

In the US, total gasoline stocks stand at 13.9 million barrels below the five-year average and around 6.8 million barrels below the seasonal minimum. Diesel inventories are 14.1 million barrels below the seasonal average. Diesel exports rose to 1.88 million bpd in the week ending 31 July, the highest volume recorded this year, as US refiners capitalize on strong international demand to fill the gap left by reduced Middle East product flows. US product stocks are being supported by strong refinery utilization and high crack spreads, but the underlying tightness is not easing.

Geopolitical risk is keeping crude prices elevated despite the domestic bearish signal

Despite the bearish crude stock data, the broader geopolitical backdrop is preventing a sharper price decline. WTI was trading above $81 per barrel at the start of the week, supported by Iran’s confirmation that the imminent reopening of the Strait of Hormuz will not result from negotiations with Oman, and by the latest Houthi strike on Saudi Arabia’s Jazan refinery on 9 August, which damaged a storage tank before the resulting fire was quickly extinguished. Europe also faces an additional crude supply constraint following repeated attacks on tankers loading at the Caspian Pipeline Consortium Black Sea terminal in late July, which reduced pipeline operating rates. Those flows have not yet recovered and upstream fields have cut production accordingly.

US onshore rig activity data signals that domestic producers are maintaining capital discipline and require WTI prices to stay above $80 per barrel to sustain current drilling activity. A sustained drop to $70 per barrel would reduce oilfield activity. That price floor, combined with the structural product tightness visible in both US and European inventory data, suggests that the crude price softness triggered by today’s EIA data is likely to be limited in duration unless the geopolitical situation improves materially.

What high crack spreads mean for consumers

The gap between refined product prices and crude oil, known as the crack spread, measures how much refiners earn per barrel they process. Gulf Coast ultra-low sulfur diesel crack spreads averaged $69 per barrel for the week ending 7 August. Jet fuel crack spreads against benchmark crude are similarly elevated. These are not normal margins; they reflect genuine physical tightness in the supply of fuels that power vehicles, aircraft and heating systems. National regular gasoline prices in the US fell marginally last week as flat crude prices narrowed on hopes of a US-Iran deal, but rising crude prices over the weekend and at Monday’s market open suggest retail gasoline prices could increase again in the coming days. The transition from a crude oil supply shock to a refined product supply crisis means the pressure on consumers has not peaked.

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