Domestic oil stocks climbed while demand for gasoline and other fuels derived from crude slowed last week as Americans scaled back consumption following recent price surges.

The U.S. Energy Information Administration (EIA) said Wednesday oil inventories for the week ended Oct. 22, excluding those in the Strategic Petroleum Reserve, increased by 4.3 million bbl from the previous week.

Overall petroleum demand dropped 9% week/week, EIA reported in its Weekly Petroleum Status Report. Demand was led lower by a 3% decline in motor gasoline consumption and a 22% drop in demand for “other” oils – a broad category that does not include transportation fuels.

Oil demand tapered as prices soared – West Texas Intermediate (WTI) crude topped $83/bbl in the covered week – a 2021 high at the time. WTI prices this week exceeded $84 on Tuesday, the highest level since 2014.

At the same time, U.S. imports climbed. Oil imports averaged 6.3 million b/d last week, up by 430,000 b/d from the previous week. Over the past four weeks, crude oil imports averaged about 6.3 million b/d, up 15% from a year earlier.

While demand fell last week, the United States has ramped up imports to meet elevated consumption levels this fall because domestic output is flat as many U.S. producers focus on returning capital to shareholders and investing in renewable fuels. Production last week held steady at 11.3 million b/d.

At 430.8 million bbl, U.S. oil stocks are about 6% below the five-year average.

While demand has proven choppy in recent weeks amid lofty prices, overall consumption this year has trended upward with increased economic activity and a recovery from the pandemic. 

An increase in refinery demand for crude has outpaced supply, “resulting in a relatively steady flow out of inventories at Cushing and other U.S. storage locations,” RBN Energy LLC analyst Housley Carr said. If not for imports and occasional demand pauses, stocks could be down more.

U.S. oil refinery inputs averaged 15.0 million b/d last week, up 58,000 b/d from the previous week’s average. Refineries operated at 85.1% of their operable capacity last week, up from 84.7% the prior week and 74.6% a year earlier.

Meanwhile, over the past four weeks, demand overall was solid on a year/year basis. In that time, total petroleum consumption averaged 20.8 million b/d, up 10% from the same period last year. Over the same period, gasoline demand was up 10% and distillate fuel demand rose 4%. Jet fuel consumption jumped 45%.

Global demand is also mounting as more countries emerge from the pandemic, fueling competition for limited supply and adding to the upward price pressure.

“The global energy supply crunch continues to show its teeth, as oil prices extend their upward march this week,” said Rystad Energy analyst Louise Dickson. This is “a result of traders pricing in the ongoing rise in fuel demand – which amid limited supply response is depleting global stockpiles.”