The Energy Information Administration reported a crude oil inventory decline of 2.7 million barrels for the week to January 11 but the report failed to have any palpable effect on oil prices. Inventories are about 8 percent above the five-year average for the season.
Yesterday, the American Petroleum Institute had reported an uncharacteristically modest estimated inventory draw of 560,000 barrels for last week.
The EIA said refineries in the U.S. had processed an average 17.2 million barrels of crude daily in the seven days to January 11, producing 9.6 million bpd of gasoline and 5.4 million bpd of distillate fuel. This compares with an average processing rate of 17.6 million bpd a week earlier, and gasoline production of 9.4 million bpd, with distillate fuel production at 5.6 million bpd.
Gasoline inventories, the EIA said, added a whopping 7.5 million bpd last week, with distillate fuel inventories rising by 3 million barrels.
This week’s inventory report comes on the heels of EIA’s latest Short-Term Energy Outlook, which is the first that covers not just this year but also 2020. In both these years, the United States will increasingly become a major force to reckon with in oil. Last year, the EIA said, crude oil production in the country rose by as much as 2.2 million bpd and the rise will continue this year and next. Related: Russia Looks To Build ‘LNG Island’ To Supply Booming Asian Market
This year, the EIA expects U.S. production to grow by 1.7 million bpd, with the rise slowing down further in 2020 to 1.2 million bpd. This growing production will continue to shrink imports, from 2.4 million bpd last year to 1.1 million bpd this year and to less than 100,000 bpd in 2020. At the end of 2020, the EIA expects the U.S. to become a net exporter of crude oil.
Meanwhile, prices remain around US$50 for West Texas Intermediate and US$60 for Brent crude as OPEC+ begin cutting production but worries about the global economy persist.
At the time of writing, WTI was trading at US$52.20 a barrel, with Brent crude at US$60.85 a barrel.
By Irina Slav for Oilprice.com
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