(+) US Weekly Update: Trump Aims to Replenish the SPR

Monday the world witnessed the inauguration of President Donald Trump, and the 47th President of the United States promised that the golden age of America begins now. Benchmark oil prices has travelled slightly lower since the inauguration, and traders seems hesitant to go short due to geopolitical risk and fear going long due to soft demand growth outlook.

President Donald Trump has announced his administration’s plans to replenish the US Strategic Petroleum Reserves to its capacity at 714 million barrels. Current level of the SPR is 393 million barrels.

The refilling of the SPR is part of Trumps bigger energy philosophy to boost American growth, and it aims to lower prices, refill the SPR and export American energy all over the world.

The Biden administrations fresh sanctions against Russia and Trumps promise to tighten sanctions against Iran could help balance markets. Both countries have circumvented sanction before and has the knowledge to do it again, but at heavier discounted prices.

Figure 1: Trade War Uncertainties Weighing on Crude Prices

US Crude inventories and production

US commercial crude oil inventories decreased by 1 million barrels in the week ending January 17, with market forecasters predicting 1.9 million barrels decrease in crude stocks. U.S. commercial crude oil inventories are about 6 percent below the five-year average for this time of year and 9 million barrels lower than a year ago. U.S. crude oil refinery inputs averaged 15.5 million barrels per day during the week ending January 17, 2025, which was 1.125 Kbpd lower than the previous week`s average. Refineries operated at 85.9 percent of their operable capacity last week.

Figure 2: US Crude Stocks including SPR at 806.2 million Barrels

Figure 3: US Crude Stocks Excluding SPR at 411.7 million Barrels

US Rig Activity

The total number of active rigs operating in the US according to Baker Hughes rig count dropped by four rigs last week, currently at 580. Oil focused rigs decreased last week, from 480 to 478 active rigs. Gas focused rigs decreased by two, now at 98 active rigs. Miscellaneous rigs remain flat at four active rigs.

Figure 4: Active Oil Focused Rigs Decreased From 480 to 478

Figure 5: Gas Focused Rigs Decreased from 100 to 98 Active Rigs

Figure 6: Total Active Rigs in the U.S. Dropped by Four Last Week, now at 580

Figure 7: 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: January 23, 2025