Crude oil prices continued higher today after the Energy Information Administration reported a 10-million-barrel draw in crude oil inventories.
The report followed the American Petroleum Institute’s estimate of an 11.1-million-barrel draw in inventories, released yesterday. The estimate pushed WTI to the biggest intraday gains in two weeks.
Analysts had expected the EIA to report a draw of 2.133 million barrels for the week to August 23. For the week before, the authority had estimated a draw of 2.7 million barrels.
The EIA also reported a 2.1-million-barrel drop in gasoline inventories and a 2.1-million-barrel draw in distillate fuel inventories.
Refineries processed 17.4 million bpd last week, producing 10.7 million bpd of gasoline and 5.2 million barrels of distillate fuels. This compared with an average daily production of 9.9 million bpd of gasoline and 5.3 million bpd of distillate fuels a week earlier.
At the time of writing, West Texas Intermediate was trading at US$56.45 a barrel, up by close to three percentage points, with Brent crude at US$60.22 a barrel, also up though more modestly.
Yesterday’s API was certainly the main reason behind the price jump as it served to ease the recession fears that had been plaguing analyst firms and the media for the last couple of months. Yet a report about OPEC’s production also helped. The report said
The cartel’s compliance level with the production cuts agreed in December had reached 159 percent in July thanks to Saudi Arabia’s continued deeper cuts and the decline in Venezuelan and Iranian production.
Now, with the draw confirmed by official data, the upward trend will in all likelihood continue, helped by the news that Chinese imports of U.S. crude jumped by 45 percent on the year last month. The jump came in spite of the deepening trade confrontation between the two and ahead of the introduction of a 5-perent tariff on U.S. oil shipped to China.
By Irina Slav for Oilprice.com
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