Crude oil prices inched higher after the Energy Information Administration today reported a 1.4-million-barrel crude draw, accompanied by a draw in gasoline stockpiles.
These, according to the authority, shed 1.2 million barrels in the week to April 12, while distillate fuel inventories fell by 400,000 barrels.
This compares with a 7-million-barrel build in crude oil two weeks ago, a 7.7-million-barrel decline for gasoline stockpiles, and a 100,000-bpd in distillate inventories.
The EIA also reported a gasoline production rate of 9.9 million barrels daily last week and a distillate fuel production rate of 4.8 million barrels daily. This compares with 10.2 million bpd of gasoline for the prior week and 5 million bpd for distillate fuel. Refinery throughput averaged 16.1 million bpd last week.
West Texas Intermediate has been trending higher despite growing suspicion that OPEC+ will put an end to its production cut deal in June instead of extending it into the second half of the year as Saudi Arabia wanted.
It seems that despite the cartel’s efforts to push prices higher, US$70 per barrel of Brent has become a psychologically significant threshold, at which demand begins to suffer, as the head of the International Energy Agency Fatih Birol told S&P Global Platts in an interview earlier this week.
But fundamentals are not the only problem. Russia’s Finance Minister Anton Siluanov this weekend speculated that oil prices could drop as low as US$40 a barrel if the OPEC+ deal ended early, which was likely. The reason for the earlier, rather than later, end of the deal was to boost market share, which is being threatened by U.S. production, Siluanov said.
U.S. oil production is at an all-time high with exports also rising considerably, doubling to 2 million bpd on average last year.
At the time of writing, Brent crude traded at US$71.73 a barrel, with WTI at US$64.09 a barrel, rebounding a bit after having shed 50 dollar cents earlier on Wednesday morning.
By Irina Slav for Oilprice.com
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