Crude oil prices inched higher today after the EIA released its latest Weekly Petroleum Status Report, in which the authority said crude oil inventories had fallen by 8.6 million barrels in the week to February 22, though they are still above the seasonal five-year average.
This compares with an inventory increase of 3.7 million barrels for the previous week.
At the same time gasoline inventories went down by 1.9 million barrels in the reported period, compared with a decline of 1.5 million barrels a week earlier. Distillate fuel inventories shed 300,000 barrels in the week to February 22 while a week earlier they booked a 1.5-million-barrel draw.
Refinery throughputs stood at 15.9 million bpd last week, versus 15.7 million bpd a week earlier, with gasoline production at 9.6 million bpd and distillate fuel production at 4.8 million bpd. This compares with production rates of 9.5 million bpd for gasoline and 4.8 million bpd for distillate fuel.
Yesterday, prices perked up after the American Petroleum Institute estimated an inventory draw that the market apparently did not expect, making it another week of inventory surprises. The API estimated crude oil inventory draw came in at 4.2 million barrels.
Meanwhile, OPEC’s cuts are continuing to have a positive effect on prices despite President Donald Trump’s call on OPEC to relax as prices were getting too high. Following Trump’s tweet to OPEC, oil prices fell sharply, making many traders wonder if there were any rational rules left in the oil market.
Whatever the inventory levels in U.S. storage facilities however, production continues to grow after hitting a historic high of 12 million barrels daily two weeks ago. This fundamental factor will likely continue to pressure prices regardless of how much OPEC cuts. Yet it will pressure mostly the prices of light crude grades while heavy crude, which is what OPEC is cutting and what Venezuela is not selling, climbs higher.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Oil Prices Could Soar On Trade War Truce
- Venezuela Fails To Sell Its Heavy Crude Amid Dwindling Supply
- Thailand Pivots To Renewables As Gas Dries Up