This compared with a draw of 1.5 million barrels for the previous week, leaving inventories at 416.8 million barrels, which was some 15 percent below the five-year average for this time of the year.
As a growing number of analysts revise their oil price forecasts upwards, the EIA also reported mixed inventory data for fuels.
In gasoline, the EIA estimated an inventory decline of 800,000 million barrels for the week to June 3, which compared with a draw of 700,000 barrels for the previous week.
Gasoline production averaged 10 million bpd last week, which was slightly higher than the average for the previous week. Goldman Sachs recently said both crude oil and gasoline prices would need to rise a lot further to start undermining demand.
In middle distillates, the EIA reported an inventory build of 2.6 million barrels for the week to June 3. This compared with a draw of half a million barrels for the previous week.
Middle distillate production averaged 5 million barrels daily last week, which was another modest output increase on the week before.
Retail fuel prices in the U.S. have been shattering record after record recently due to the combination of tight oil supply and lower refining capacity than before the pandemic, while demand remains robust.
The situation may still be a long way from resolution, however, with the upside potential in oil prices remaining substantial. The reason is that, according to some analysts, among them Goldman Sachs’ Damien Courvalin, the current oil shortage is a structural rather than a cyclical one.
This means that year of underinvestment and steadily rising demand have tipped the market into an undersupply that cannot be fixed quickly or easily. According to Courvalin, even if Saudi Arabia boosts production considerably, it won’t help beyond the immediate term.
By Irina Slav for Oilprice.com
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