(+) US Oil Weekly Update: Hitting Lowest Seasonal Level Since 1996

U.S. commercial crude oil inventories fell sharply last week, underscoring tightening supply in the market. According to the U.S. Energy Information Administration’s (EIA) weekly petroleum report, stockpiles dropped by 3.2 million barrels to 419 million barrels for the week ending July 18 — more than double analysts’ expectations of a 1.5-million-barrel draw.

At 419 million barrels, commercial inventories now sit 9% below the five-year seasonal average and have fallen to their lowest level for this time of year since 1996. Meanwhile, crude stockpiles at Cushing, Oklahoma — the delivery hub for NYMEX oil futures — climbed to their highest level since June.

Production Continues to Slide

U.S. crude production also fell, down by 102,000 barrels to 13.273 million barrels per day, marking a decline of 27,000 barrels compared to the same week last year. Activity in the shale patch has slowed considerably, with the number of active oil-focused rigs plunging by 60 so far in 2025. Meanwhile gas focused rigs hit its highest level since March 2024 with 117 active rigs after a weekly increase of nine rigs.

Investment Pullback Hits the Industry

Producers are grappling with breakeven prices estimated between $60 and $65 per barrel, making new investments less attractive amid low oil prices and heightened uncertainty. This has led to a significant pullback in capital spending across the U.S. oil sector.

Compounding the issue, shale wells — particularly in the prolific Permian Basin — see production volumes halved within a year, requiring constant drilling to maintain output levels. Industry observers warn that the impact of today’s reduced activity may not fully materialize until next year.

Figure 1. West Texas Intermediate Contracts.

Figure 2. West Texas Intermediate the Last Five Days.

US Crude inventories and production.

US commercial crude oil inventories decreased by 3.2 million barrels in the week ending July 18, with market forecasters predicting between 1 and 1.5 million barrel-decrease in crude stocks. U.S. commercial crude oil inventories are about 9 percent below the five-year average for this time of year and 17.5 million barrels lower than a year ago. U.S. crude oil refinery inputs averaged 16.936 million barrels per day during the week ending July 18, 2025, 87 Kbpd higher compared to the previous week`s average. Refineries operated at 95.5 percent of their operable capacity last week. American production decreased by 102 Kbpd last week at 13,273 million barrels per day still declining production and activity in the US.

Figure3. US Domestic Production

Figure 4. US Crude Stocks including SPR at 821.5 million Barrels.

Figure 5. US Crude Stocks Excluding SPR at 419.0 million Barrels.

US Rig Activity.

The total number of active rigs operating in the US according to Baker Hughes rig count increased by seven last week, currently at 544. Oil focused rigs decreased by two last week, at 422 active rigs. Gas focused rigs increased by nine last week now at 117 active rigs. Miscellaneous were flat last week still at five active rigs.

Figure 6. Active Oil Focused Rigs Decreased by Two Last Week now at 422

Figure 7. Active Gas Focused Rigs Increased by Nine Last Week Now at 117

Figure 8. Total Active Rigs in the U.S. Increased by Seven Last Week, now at 544.

Figure 9. Rig Count in Major Basins.

Baker Hughes has issued the rotary rig counts as a service to the petroleum industry since 1944, when Baker Hughes Tool Company began weekly counts of U.S. and Canadian drilling activity. Baker Hughes initiated the monthly international rig count in 1975. The North American rig count is released weekly at noon Central Time on the last day of the work week.

By the Numbers July 24, 2025.

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