Crude oil prices moved higher today after the Energy Information Administration reported a crude oil inventory draw of 2.2 million barrels for the week to September 22.
This compared with an inventory draw of 2.1 million barrels for the previous week, which in turn followed a build of around 4 million barrels for the week before that.
In fuels, the EIA reported inventory builds.
Gasoline stocks added 1 million barrels in the week to September 22, which compared with a decline of 800,000 barrels for the previous week.
Gasoline production averaged 9.1 million barrels daily last week, which compared with 9.7 million barrels daily a week earlier.
In middle distillates, the EIA reported a modest inventory build of 400,000 barrels for the week to September 22, with production averaging 4.9 million barrels daily.
This compared with an inventory draw of 2.9 million barrels for the previous week, when production of middle distillates averaged 4.8 million barrels daily.
The EIA report followed the American Petroleum Institute’s estimate, which showed a crude oil inventory draw of some 1.6 million barrels. More importantly, however, the API also estimated that stocks at Cushing, Oklahoma, had slipped to below 22 million barrels, which is on the brink of the minimum operating level for the hub.
Meanwhile, earlier today, oil prices inched up on continued concern about supply, despite the API’s estimate of an inventory build rather than the expected draw.
The news about Cushing also had a bullish effect on prices because of draws continue, it would reach a point, from which it would be useless to pump out crude due to compromised quality.
The coming seasonal maintenance for refiners could help build inventories to some extent but on the other hand Russia’s ban on gasoline and diesel exports would lead to higher demand for crude from refiners as soon as maintenance ends.
ADVERTISEMENT
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- The UK Approves A Controversial $3.8-Billion Oil And Gas Project
- China Set To Raise Fuel Exports Amid Higher Demand And Margins
- Oil Prices Climb As Cushing Oil Stocks Near Historic Lows
The current price surge is first and foremost due to robust global oil demand, a tightening markets and growing fears of an approaching imbalance in the market supported by record Chinese crude oil imports and equally record fuel exports.
Another bullish factor is oil traders buying increasing volumes of crude and fuel futures thus signalling fears of shortages.
That is why oil prices are now on an upward trajectory with Brent crude expected to break through $100 a barrel soon and possibly even touch $110.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert