Oil prices climbed higher today after the Energy Information Administration reported a crude oil inventory decline of 1 million barrels for the week to January 28.
In fuels, the EIA reported a mixed picture.
The agency said that at 415.1 million barrels, crude oil inventories were close to 10 percent below the five-year average levels for this time of the year.
A day before the EIA released its report the American Petroleum Institute estimated U.S. crude oil inventories had declined by 1.645 million barrels, reinforcing the perception that the oil market was getting tighter while demand was on the rise.
Gasoline inventories added 2.1 million barrels last week, according to the EIA, compared with a build of 1.3 million barrels for the previous week. Gasoline production averaged 8.7 million bpd last week, which compared with 8.9 million bpd a week earlier.
In middle distillates, the authority estimated an inventory decline of 2.4 million barrels for the last week of January, with production averaging 4.6 million bpd. This compared with an inventory draw of 2.8 million barrels for the previous week and production of 4.8 million bpd.
Refineries processed 15.2 million bpd last week, compared with 15.5 million bpd. Imports stood at 7.1 million bpd, which compared with 6.2 million bpd for the previous week.
Before the EIA report, prices got support from the API estimate, which countered analyst expectations of an inventory build. However, the effect of the report on prices was muted because the industry group also estimated an increase in gasoline stocks, suggesting lack of enough strength in demand.
At the time of writing, Brent crude was trading at $89.68 per barrel, with West Texas Intermediate at $88.75 a barrel, both up from opening. Benchmarks enjoyed the support of tight global inventories and reports that OPEC+ decided not to boost production beyond its 400,000 monthly additions quota.
A big part of the likely reason for this is that most of OPEC+ does not have the spare capacity to boost production by any more barrels—a fact that is also strongly bullish for oil.
By Irina Slav for Oilprice.com
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