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The American Petroleum Institute (API) reported a draw of 4.079 million barrels in United States crude oil inventories, compared to more modest analyst expectations that inventories would draw only 756,000 barrels for the week ending September 29.
Gasoline inventories, on the other hand, delivered a blow with a larger than expected build of 4.19 million barrels for the week ending September 29, against an expected build of only 1.088 million barrels. Last week, too, saw a large gasoline build.
Both WTI and Brent benchmarks fell again on Tuesday after a bad Monday, both down more than a dollar week on week as reports that OPEC raised production in September by as much as 120,000 barrels per day, according to a Bloomberg survey.
WTI hitting a 7-month high last Monday at $52.22.
Gasoline was trading up on Tuesday, at $1.56, down .44% on the day, but down almost 8 cents from last week.
While the inventory draws keep piling on the United States, the global supply/demand situation for crude oil is still not balanced, and fears are that OPEC’s currently proposed end date of March 2018 for the cuts will prove to be too soon.
For the US, the total draw for crude oil in 2017 now stands at just shy of 26.5 million barrels, according to API data. EIA data show a 15-million-barrel draw for year-to-date 2017, through last week’s report.
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As the United States heads into the fall, the end of driving season has many analysts forecasting a slower-paced drawdown for crude oil in the near future.
Distillate inventories fell again this week, 584,000 barrels. Inventories at the Cushing, Oklahoma, site increased by 2.084 million barrels.
By 4:40pm EST, WTI was trading down a bit after the data, at $50.38 with Brent Crude trading at $55.91.
The U.S. Energy Information Administration report on oil inventories is due on Wednesday at 10:30 a.m. EDT.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.