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This week the American Petroleum Institute reported a “shockingly” high draw of 7.6 million barrels of oil despite expert predictions that U.S. supplies would increase by 1.5 million units in the wake of multiple draw weeks, according to Zero Hedge.
The report marks five straight weeks of draws in a season that is typically marked with lower demand and consequential supply builds. The news caused West Texas Intermediate prices to spike above $49 shortly after the numbers were released.
Gasoline supplies, on the other hand, jumped by two million barrels—a more lukewarm build than the expected 500,000.
Supplies at Cushing, Oklahoma, rose by 400,000 barrels – a staggering four times more than the 100,000-barrel increase that analysts had anticipated would be announced today.
Cushing oil supplies hit a 10 month low last week, offering some hope for WTI prices.
Oil futures climbed after the report for the week ending on 30 September was released on Tuesday, according to Market Watch.
"Demand is rising," Phil Flynn, senior market analyst at Price Futures Group said. "We are seeing the U.S. market get in balance a lot quicker than anyone thought."
Tomorrow’s Energy Information Administration (EIA) report will either confirm or deny the veracity of the API’s forecasts, and the twain seldom agree.
Last week, crude oil markets got a boost of optimism from the EIA, when the agency reported a 1.9-million-barrel decline in commercial crude inventories to a total of 502.7 million barrels. Despite the decline—and multiple weeks of decline— the agency again noted that the size of inventories continues to be unusually high for the season.
At the time of writing, West Texas Intermediate traded at $49.19 and Brent stood at $51.31.
By Zainab Calcuttawala for Oilprice.com
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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…