Crude oil inventories in the U.S. reached 499.7 million barrels in the week to September 30, the EIA reported, down by 3 million barrels from the previous week. The figure is bound to have a strong positive effect on international markets, which have already enjoyed a boost of optimism following OPEC’s meeting in Algeria, where a production freeze was all but agreed by its members.
Last week the EIA reported a draw of 1.9 million barrels in a not-too-common sync with the American Petroleum Institute, which had estimated inventories to have gone down by 752,000 barrels. Yesterday, API reported a huge draw of 7.6 million barrels, marking the fifth week of negative estimates. Now that EIA has confirmed a draw, though not as huge as the API reported it, it should reinforce a bullish sentiment.
The EIA said refineries processed crude at a daily rate of 16 million barrels, down from the previous week’s 16.3 million barrels, operating at 88.3 percent of capacity as driving season is over and winter demand has not yet kicked in.
Gasoline production averaged 10 million barrels per day in the week to September 30, with inventories rising by 200,000 barrels, remaining above what’s usual for the season. Distillate output stood at over 4.7 million bpd, up on the previous week with stockpiles down by 2.4 million barrels, again in excess of the average for this time of year.
Brent crude hit a high of US$51.72 a barrel in European trading today, up US$0.83, which is its highest since early June, on the back of API’s super positive estimate. West Texas Intermediate also rode the optimism wave, reaching US$49.44 a barrel, up US$0.75.
According to analysts, EIA’s confirmation of the API figures could boost WTI enough to help it pass the US$50 threshold. At the time of writing, WTI was at US$49.59 a barrel, up 1.85 percent from yesterday’s close. Brent was trading at US$51.72 a barrel, up 1.67 percent. Both benchmarks are likely to continue rising during today’s session thanks to EIA figures.
By Irina Slav For Oilprice.com
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