Crude oil prices moved higher today after the Energy Information Administration reported inventories had shed 7.2 million barrels in the week to August 27.
This compared with a crude oil inventory draw of 3 million barrels estimated by the EIA for the previous week and analyst expectations for a draw of 2.83 million barrels.
A day before the EIA’s report, the American Petroleum Institute estimated an oil inventory draw of over 4 million barrels, which was larger than expected.
Just as OPEC+’s meeting begins in Vienna, the U.S. energy authority estimated gasoline stocks had added 1.3 million barrels in the week to August 27, with production averaging 9.9 million bpd during the period.
This compared with an inventory draw of 2.2 million barrels a week earlier and production averaging 10.2 million bpd.
Middle distillate stocks registered a draw of 1.7 million barrels in the reporting period, with production averaging 4.8 million bpd.
A week earlier, the EIA estimates a middle distillate stock build of a modest 600,000 barrels and average production of 5 million bpd.
Despite the rising production of gasoline, prices at the pump have also been on the rise, which last month prompted President Biden to call on OPEC to add more supply to global oil markets.
The most recent price jump, however, was the result of the devastation wrought by Hurricane Ida on the Gulf of Mexico and Gulf Coast oil industry, with some key ports still closed, with reopenings likely weeks away.
The chances of this actually happening, however, are slim. OPEC does not seem to believe the market needs any more oil right now. In fact, the extended cartel’s joint technical committee estimated in a recent report that the oil market will swing unto a surplus by next May, with the surplus reaching some 1.6 million bpd, from a current deficit of 900,000 bpd.
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By Irina Slav for Oilprice.com
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