Crude oil prices rose higher today, after the Energy Information Administration confirmed the crude oil inventory draw reported earlier by the API.
The EIA estimated U.S. crude oil inventories had shed 7.5 million barrels in the week to July 10, after a build of 5.7 million barrels reported for the previous week. The American Petroleum Institute had estimated an inventory draw of as much as 8.322 million barrels a day earlier.
Analysts had expected the EIA to report a crude oil inventory draw of 2.275 million barrels.
Despite the inventory draw, which followed several other large weekly inventory draws, total U.S. crude oil stockpiles are about 17 percent above the five-year average for the season.
Even so, refinery run rates are rising, albeit unevenly. Last week, they averaged 14.3 million bpd, slightly down from a week earlier, and up from 14 million bpd two weeks earlier.
Refineries churned out 9.1 million bpd of gasoline last week, compared with 9 million bpd a week earlier and 8.9 million bpd two weeks earlier.
Gasoline inventories shed 3.1 million barrels last week, after a weekly inventory decline of as much as 4.8 million barrels in the previous week. A week before that, they added 1.4 million barrels.
Distillate fuel production averaged 4.9 million bpd last week. This compared with 4.8 million bpd a week earlier and 4.6 million bpd two weeks earlier.
Distillate fuel inventories, however, fell by 453,000 barrels in the week to July 10, after a weekly build of 3.1 million barrels in the previous week and a 600,000-barrel inventory decline two weeks earlier.
Distillate fuel demand has been much slower to recover as most airlines continue to operate at extremely reduced capacity, dampening any prospect for a speedy recovery in jet fuel demand and forcing refiners to produce more diesel fuel.
Oil prices jumped in response to the API’s inventory report but the recovery is fragile: there is concern among traders that OPEC+’s plan to ease production restrictions from next month would tip the fundamentals scale towards another oversupply.
At the time of writing, Brent crude was trading at 43.07 a barrel, with West Texas Intermediate at $40.45 a barrel.
By Irina Slav for Oilprice.com
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