A day after the American Petroleum Institute played the fairy godmother to oil bulls by reporting a huge draw in U.S. crude inventories, the EIA reinforced the mood by confirming a significant build in inventories.
According to the authority, U.S. commercial crude oil inventories fell by 6.4 million barrels in the week to May 26, to a total of 509.9 million barrels—still in the upper half of seasonal limits but not exceeding the top end anymore, after a second weekly draw.
U.S. inventories have expanded by 24 million barrels overall in 2017, according to EIA data.
The EIA reported refinery runs of 17.5 million bpd, operating at 95 percent of capacity and producing 10.4 million barrels of gasoline daily and 5.2 million barrels of distillate. Gasoline stockpiles booked a drop of 2.9 million barrels last week, compared with a fall of 800,000 barrels in the previous week.
All figures point to a usual seasonal change as driving season in America draws nearer. This may be cause for optimism that at least part of the inventory will become gasoline and be used up during the summer, but last year, the driving season failed to take care of excess crude oil inventories and considerably contributed to a general feeling of gloominess among oil traders.
Still, just like API’s report propped up prices, albeit not by much, the EIA’s latest figures are bound to boost them further. The effect could also last longer than last week’s price reaction to the inventory draw as refinery runs have been increasing consistently over the last few weeks and more inventory declines are likely in the coming weeks.
WTI was trading up 0.17% at $48.40 at 11:13am EST, with Brent trading down 0.16% at $50.68 per barrel.
By Irina Slav for Oilprice.com
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