U.S. crude oil inventories shed an impressive 10.6 million barrels in the week to July 24, the Energy Information Administration reported today. This compares with a build of 4.9 million barrels for the previous week. However, inventories remain 17 percent above the five-year seasonal average.
A day earlier, the American Petroleum Institute reported an estimated crude oil inventory decline of 6.83 million barrels, versus analyst expectations of a much more modest draw of 357,000 barrels.
A surge in new Covid-19 infections in the United States offset the oil price gains that followed the API's report and now the figures that the EIA has reported will likely help prices recoup some of those losses.
As the global oil demand outlook remains mostly negative since the coronavirus is resurging not just in the United States but in other countries as well, optimism about the oil industry-especially the downstream segment-is on the wane. The EIA's inventory report may help change that.
In gasoline, the authority estimated a 700,000-barrel inventory build for the week to July 24, compared with a 1.8-million-barrel draw a week earlier. The EIA also said refineries churned out an average of 9.2 million bpd of gasoline last week, compared with 9.1 million bpd a week earlier.
In distillate fuels, the EIA reported an inventory increase of half a million barrels, compared with a 1.1-million-barrel inventory build for the previous week. Distillate fuel production, the EIA said, averaged 4.8 million bpd last week, slightly up on the previous week.
At the time of writing, Brent crude was trading at $43.70 a barrel and West Texas Intermediate was changing hands at $41.37 a barrel, both slightly up from yesterday's close. The $40-43 range has proved quite resilient over the past couple of weeks, not least because of the global economy outlook amid the pandemic, which remains overwhelmingly pessimistic, with expectations for slower rather than quicker recovery around the world, notably in the U.S., the world's largest oil consumer.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More