The Energy Information Administration reported a huge oil inventory draw of 9.5 million barrels for the week to July 5, confirming and even exceeding the American Petroleum Institute’s estimate of an 8.13-million-barrel draw.
Today’s figure follows an estimated a 1.1-million-barrel draw in oil inventories for the last week of June.
In gasoline, the EIA reported a draw of 1.5 million barrels for last week, which compares with a draw of 1.6 million barrels a week earlier. Gasoline production averaged 10.4 million bpd, which compares with 9.9 million bpd a week earlier.
In distillate fuels, the authority reported an increase in inventories of 3.7 million barrels, versus a build of 1.4 million barrels for the previous week. Production last week averaged 5.4 million bpd, compared with 5.3 million bpd a week earlier.
As oil producers begin to evacuate staff from their platforms in the Gulf of Mexico ahead of a possible storm, oil prices continued upwards, booking their fourth consecutive daily gain in a row. Among the factors driving them higher, in addition to the now chronic Middle Eastern tension, was the news Russia’s oil production had fallen near a three-year low in June, later supported by API’s inventory report.
On the flip side for prices, worry about the direction the global economy is taking continues as persistent as the fears of an open military conflict in the Middle East only with a negative effect on prices.
As demonstrated after OPEC’s announcement about an extension to the 1.2-million-bpd production cuts into 2020, traders are too concerned with global economic growth and, consequently, crude oil demand. For now, this concern is keeping a lid on prices despite the recent rally.
At the time of writing, Brent crude was trading at US$65.98 a barrel, with West Texas Intermediate at US$59.52 a barrel. Both were up by almost three percent from yesterday’s close. This week’s hurricane updates will probably act as additional tailwind for WTI in the next few days and maybe into next week.
By Irina Slav for Oilprice.com
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