Oil Rises After EIA Confirms Major Crude Draw

Crude oil prices moved higher today after the U.S. Energy Information Administration reported an inventory decline of 10.6 million barrels for the week to August 25.

The estimate compared with a draw of 6.1 million barrels for the previous week.

A day earlier, the American Petroleum had estimated inventories had shed a massive 11.5 million barrels in the week to August 25, which prompted a spike in oil prices.

In fuels, the Energy Information Administration reported a modest gasoline draw and a middle distillate increase.

In gasoline, stocks shed 200,000 barrels in the reporting period, which compared with a build of 1.5 million barrels for the previous week.

Gasoline production averaged 10 million barrels daily last week, which compared with 9.7 million barrels daily a week earlier.

In middle distillates, the authority estimated an inventory increase of 1.2 million barrels for the second to last week of August, which compared with a modest build of 900,000 barrels for the week before that.

Middle distillate production averaged 5 million barrels daily last week, which compared with 5.1 million barrels daily for the previous week.

Refineries processed 16.6 million bpd last week, operating at 93.3% of capacity, with imports averaging 6.6 million bpd, down from the previous week, when imports averaged 6.9 million bpd.

Oil prices, meanwhile, have been on the rise after two depressed weeks during which traders focused on economic data from the United States and China.

This week, however, things changed when the American Petroleum Institute reported that massive inventory draw, suggesting demand for fuels in the world's biggest consumer remained resilient in the face of challenges.

Hurricane Idalia, which is currently moving towards the Florida coast, contributed to the price rise with the potential for more evacuations in the Gulf of Mexico after Chevron suspended operations at three platforms.

At the time of writing, Brent crude was trading at $86.03 per barrel and West Texas Intermediate was trading at $81.84 per barrel, both up from opening.

By Irina Slav for Oilprice.com

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