The Energy Information Administration reported a 3.4-million-barrel draw in crude oil inventories for the week to November 24, countering the American Petroleum Institute’s estimate of a 1.82-million-barrel build reported yesterday. This is the first time in four weeks when EIA’s data contradicts API’s.
A decline in crude oil inventory was to be expected, as the Keystone pipeline that ships almost 600,000 bpd into the U.S. from Canada remained shut for the week and was only restarted this yesterday, after a 5,000-barrel leak.
The EIA said refineries last week processed 17 million barrels of crude per day, producing 10.2 million barrels of gasoline, down from 10.4 million bpd in the previous week. Inventories of the fuel went up by 3.6 million barrels.
As oil traders prepare for the Vienna Club meeting tomorrow, prices have become extremely volatile, especially as doubts deepen that we might not see the nine-month extension to the oil production deal that most expected, thanks to Russia’ reluctance to commit to such a long period of subdued production. A six-month extension is also a likely outcome from the meeting, some analysts believe. Related: U.S. Oil Has One Fatal Weakness
Meanwhile, U.S. producers are locking in future production prices of US$50-60 a barrel, with the hedges for the third quarter surging by 147 percent from the previous quarter to almost 900,000 barrels daily, data from Wood Mackenzie has shown. This means they will be better placed to increase their production whatever happens tomorrow in Vienna.
At the time of writing, WTI was trading at US$57.77 a barrel, with Brent at US$63.12, both down from yesterday’s close.
By Irina Slav for Oilprice.com
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