American Petroleum Institute (API) estimated that U.S. crude oil inventories fell by 2.6 million barrels in the week ending August 28, reversing the previous week’s increase of 4.2 million barrels.

Commercial crude oil inventories excluding the Strategic Petroleum Reserve (SPR) have declined by just over 48 million barrels over the past 20 weeks. Even so, U.S. crude inventories are up 3.1 million barrels for the year, according to API data, as SPR withdrawals have helped keep supplies in check.

For the week ending August 28, another 3.1 million barrels were drawn from the SPR to support commercial inventories. That left total crude held in the reserve at 286.6 million barrels, or 445 million barrels below maximum capacity.

The generally accepted operational minimum for oil in the SPR is between 250 million and 300 million barrels. Below that range, the reserve may have difficulty pumping and processing oil efficiently.

U.S. production for the week ending August 21 rose to 13.843 million barrels per day, up from 13.830 million barrels per day in the prior week and 461,000 barrels per day higher than a year earlier.

At 4:16 p.m. ET on Tuesday, Brent crude was trading up on the day at $95.28, a gain of 5.9% and nearly $7 per barrel higher than a week earlier. WTI was also higher, trading at $90.84, up $5.08 per barrel, or 5.92%, and nearly $9 per barrel above the same time last week.

Gasoline inventories rose by 300,000 barrels in the week ending August 28, after falling by 3.2 million barrels in the previous week. In the prior reporting period, gasoline inventories were already 6% below the five-year average for this time of year, according to the latest EIA data.

Distillate inventories fell by 300,000 barrels, adding to a 500,000-barrel decline in the previous week. The latest EIA data showed distillate inventories were 14% below the five-year average heading into the reporting period, underscoring how product stocks remain tighter than crude even as refinery and distribution balances shift week to week.

Cushing inventories, the stocks held at the delivery hub for the WTI crude futures contract, rose by 200,000 barrels over the reporting period, following a 1 million-barrel increase in the prior week.

By Julianne Geiger for Oilprice.com