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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Oil Markets Relieved After EIA Reports Crude Inventory Draw

A day after the American Petroleum Institute surprised the market with a substantial inventory build, the Energy Information Administration dispelled doubts about the balance between supply and demand by reporting a draw of 1.1 million barrels for the week to January 19.

This compares with a draw of 6.9 million barrels for the week to January 12.

At 411.6 million barrels, inventories of crude oil in the world’s top consumer are still within the average of the seasonal range and this is the tenth straight weekly draw, according to EIA, which would only strengthen the sentiment that demand for crude in the world’s top consumer is robust.

Gasoline inventories booked yet another weekly build, meanwhile, at 3.1 million barrels. In the prior week, gasoline inventories had risen by 3.6 million barrels, with production averaging 9.7 million bpd. Last week, average daily gasoline production stood at 9.4 million barrels per day, with refineries processing a total 16.5 million barrels of crude.

After a slight decline last week, both Brent and WTI have been doing well this week, with the international benchmark touching US$70 a barrel again for the first time since January 15 earlier today in Asian trade.

However, with bullish bets on the most popular crude oil contracts at record highs, traders are beginning to prepare for a price drop. Reuters reported today that the amount of put options on Brent crude futures has jumped markedly. The open interest on Brent put options at a price of US$70, US$69, and US$68 is now much higher than it was less than a week ago and there is more demand for put options on the contract than for call options.

Also, there is talk about a recession, with the U.S. stock market at multi-year highs and due for a correction. A recent warning from Goldman Sachs that risk appetite has reached an extreme level could have a sobering effect on the market but EIA’s latest figures would hardly support it.

By Irina Slav for Oilprice.com

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Leave a comment
  • petergrt on January 24 2018 said:
    At this point its all about the USD.

    The USD moves inversely with crude and other commodities, but oil has been in 90% sync lately.

    As the USD will recover, as it shall, so will the oil tank, as it shall.
  • the masked avenger on January 24 2018 said:
    I can always tell Irinas comments because she is stuck on draw. Draw is useless, you draw, you fill. Basic business.

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