Crude oil prices rose today after the Energy Information Administration reported a crude oil inventory draw of 6.6 million barrels for the week to February 5. Gasoline and middle distillate inventories were mixed again.
The report came a day after the American Petroleum Institute depressed oil traders by reporting a sizeable inventory build in gasoline, dashing hopes of a quick recovery in fuel demand.
Analysts had expected the EIA to report a build in crude oil inventories, at 1.34 million barrels.
A week earlier, the authority had estimated a crude oil inventory draw of 1 million barrels.
In gasoline, the EIA reported an inventory increase of 4.3 million barrels for the reporting period, versus a hefty rise of 4.5 million barrels reported for the previous week.
Gasoline production averaged 8.7 million bpd last week, up from 8.4 million bpd a week earlier.
In middle distillates, the EIA reported an inventory draw of 1.7 million barrels for the week to February 5, with production averaging 4.7 million bpd.
This compared with no change in inventories a week earlier, leaving them about 8 percent higher than the seasonal five-year average. Production in the last week of January averaged 4.6 million bpd.
The EIA earlier this week revised upwards its price projections for both Brent crude and West Texas Intermediate, saying it now expected them to this year average $53.20 a barrel and $50.21 a barrel, respectively. The benchmarks would rise further, albeit modestly in 2022, according to the authority.
Both Brent and WTI are already trading higher than their forecast average for the year, pushed higher by Covid-19 vaccinations and tighter supply, with some analysts and hedge fund managers expecting prices to go much higher before this year’s end, with the number mentioned ranging from $70-80 to over $100, the latter seen as possible next year.
Brent crude was trading at $61.10 a barrel at the time of writing, and West Texas Intermediate changed hands at $58.24 a barrel.
By Irina Slav for Oilprice.com
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The global oil inventories are depleting so fast in volumes far bigger than the US oil inventory draws and that bullish factor is helping the recent surge in oil prices.
Oil prices have a lot of mileage yet to go.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London