The OPEC production cut agreement…
Members of the Organization of…
U.S. crude inventories collapsed by 12 million barrels this week, marking the largest inventory draw since January 1999, according to analysis of this week’s American Petroleum Institute inventory report by ZeroHedge.
Brent oil prices had hovered around $47.92 before the API figures became public Wednesday afternoon, which caused the price to spike above $48.54 a barrel within five minutes of the release.
Also, barrel prices for West Texas Intermediate jumped to $46.14 from $45.48 after the weekly numbers were released.
Tomorrow’s Energy Information Administration data will include the government’s official inventory statistics, which do not always jive with the API report’s estimates, adding another layer of volatility to oil prices.
Analysts had expected crude inventories to rise by 905,000 barrels this week, after seeing builds in five of the past six weeks.
ZeroHedge said the massive draw could have been caused by a series of shut-ins at drilling sites in the Gulf of Mexico due to unstable weather conditions. The site cited an incident in 2013 when a 10 million barrel draw occurred as a result of a strong storm.
“We’ll need to see a significant shock to the market to break out of this range over the next several weeks.” Michael Tran, a commodities strategist at RBC Capital Markets in New York told ZeroHedge over the phone before the report was released. It seems the API report provided the shock Tran had hoped for.
According to the report, gasoline reserves fell farther than the expected 750,000 barrels; the inventories saw a deeper 2.4 million barrel draw instead. In contrast, distillate reserves jumped by 944,000 barrels.
Crude reserves in Cushing fell by 700,000 barrels against an expected 900,000 barrel draw.
Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…