US Inventory Weekly Changes
For the week ending July 25, 2025, U.S. crude oil inventories increased by 7.707 million barrels (mb) to 426.7 mb. During the same period, the Strategic Petroleum Reserve (SPR) increased by 0.197 mb to 402.503 mb. U.S. crude oil production increased marginally by 0.041 million barrels per day (mb/d) to 13.314 mb/d.
Market Drivers
This week’s inventory build comes as a surprise, not only because it challenged expectations for another draw, but because the build was the biggest one we’ve seen since the week ending January 31 of this year. Inventories are now just 6% below the five-year seasonal average, compared to 9% last week, signaling some loosening in supply.
In addition to a modest increase in production, overall imports rose by 0.16 mb/d, mostly driven by a substantial 0.511 mb/d increase in imports, particularly from PADD 5 (West Coast), which appears to have tipped the balance. Total motor gasoline imports (including both finished gasoline and blending components) last week averaged 0.691 mb/d, and distillate fuel imports averaged 0.229 mb/d.
On the demand side, we saw a pullback compared to last week’s surge. Refinery inputs decreased slightly, essentially holding flat and refinery utilization dipped only marginally from 95.5% to 95.4%, suggesting refiners are still operating near capacity. However, the real shift came from exports, which dropped significantly down by 1.157 mb/d. This could be tied to a weaker WTI–Brent spread, which has remained between $2 - $3 in recent months, well below the $4+ threshold that has historically incentivized exports.
With supply rising about 1% and demand falling nearly 6%, the outsized demand drop relative to supply growth helps explain the substantial inventory build we saw this week. This dichotomy between high imports and low exports produced the second-highest net import level recorded so far this year.
Market Response
This week’s EIA Weekly Petroleum Status Report release seemed to trigger a bearish market reaction, likely in response to the year’s second-largest inventory build. Since the report’s release, crude prices have dropped approximately $2.50 to $3, with WTI currently at $67.36 and Brent at $69.69.
It’s worth noting that despite the build in supply, one bullish indicator remains: the number of rigs drilling for oil in the U.S. fell by five this week to 410, which is 72 fewer than a year ago—marking the 14th consecutive weekly decline. This leaves the rig count at its lowest level since September 2021, as capital discipline and relatively low oil prices continue to discourage new activity.
Whether this week’s sharp supply outpacing of demand was an aberration or something more sustained remains to be seen. Additionally, concerns remain that U.S. tariff policies could slow global economic growth and weaken energy demand, weighing on crude prices. We’ll continue monitoring these developments and their effects on market fundamentals.