Crude oil prices rose further after the Energy Information Administration reported today an inventory draw of 5.1 million barrels for the week to May 27.
This compared with a draw of 1 million barrels for the previous week.
At 414.7 million barrels, U.S. crude oil inventories are some 15 percent below the five-year average for this time of the year.
In gasoline, the EIA estimated an inventory draw of 700,000 barrels for the week to May 27, which compared with a decline of half a million barrels for the previous week.
Gasoline production went up last week, averaging 10 million barrels daily, which compared with 9.4 million bpd a week earlier.
In middle distillates, the authority estimated an inventory decline of 500,000 barrels for the week to May 27, which compared with a build of 1.8 million barrels for the previous week.
Middle distillate production averaged 5 million bpd last week, compared with 5.1 million barrels daily a week earlier.
Refinery runs averaged 16 million barrels daily, with the average utilization rate at over 93 percent. Refinery shutdowns over the last two years have strained existing refining capacity, with the industry warning this utilization rate cannot be sustained for long periods of time.
The fuel squeeze might yet get worse as summer season kicks in across the northern hemisphere while Russian fuel supply abroad shrinks because of the latest wave of sanctions from the EU.
“The crude oil price is $120 per barrel but the product price — what you and I pay for petrol and diesel — is much, much higher. The overarching theme is the lack of investment,” Amrita Sen from Energy Aspects told the FT this week.
“We are in this for the long haul: potentially a decade,” the analyst added.
At the time of writing, Brent crude was trading at $116.50 per barrel and West Texas Intermediate was changing hands for $115.60 per barrel. Both benchmarks were up despite an OPEC+ decision to increase their monthly production increase target to close to 650,000 bpd for July and August each.
By Irina Slav for Oilprice.com
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