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The American Petroleum Institute (API) reported a 1.1-million-barrel drop in U.S. crude oil supplies, a smaller dip than the 3 million barrels forecast by S&P Global Platts.
According to the API, U.S. crude oil supplies fell by 1.14 million barrels for the week ended 13 May, with a build of 508,000 barrels at Cushing.
While crude oil saw a smaller draw than originally anticipated, distillates saw a larger dip than expected, down 2.0 million barrels, against the 1.4 million draw forecast.
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Gasoline stocks were down 1.9 million barrels against the 1.3 million barrels forecast.
Trading on the inventory draw, crude oil futures for June delivery settled at US$48.47 per barrel on Tuesday on the New York Mercantile Exchange, up from US$48.31.
Brent crude oil for July delivery on the Intercontinental Exchange (ICE) settled at US$49.32.
Expect more trading volatility later on Wednesday, following the release of official inventory data from the U.S. Energy Information Administration (EIA).
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Some are speculating that the EIA could report a drop in crude oil stockpiles of over 3 million barrels. In recent weeks, there has been a significant gap between API and EIA inventory reports, with volatile trading in the approximately 24-hour gap between the two reports.
Last week, the API had reported a 3.4 million build in crude oil inventories, while the EIA came out the following day with the reverse—a 3.4 draw on inventory.
In early morning trading Wednesday, WTI was up 0.20% at $48.51 per barrel. Brent Crude was up 0.14% at $49.35 as of 9:00 a.m. (CST).
By James Burgess of Oilprice.com
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James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…