Crude oil prices jumped further today after the Energy Information Administration reported a crude oil inventory draw of 3.2 million barrels for the week to January 8.
It also adds onto the inventory decline of as much as 8 million barrels reported for the previous week, which helped push oil prices higher.
Brent crude yesterday rose above $57 a barrel for the first time in almost a year thanks to Saudi Arabia’s decision to cut an additional 1 million bpd in production in February and March as the collective OPEC+ effort to control prices appeared to not be effective enough for the Kingdom.
This decision spurred talk of tight supply facing the world despite still sluggish demand amid still high new Covid-19 case numbers in some key markets, including the United States and India, even though demand is improving strongly in India as fuel demand booms.
In fuels, the EIA reported a 4.4-million-barrel increase in gasoline inventories and a 4.8-million-barrel rise in distillate fuel inventories. This compared with a 4.5-million-barrel increase in gasoline stocks and an even bigger, 6.4-million-barrel rise in middle distillate inventories a week earlier.
Gasoline production stood at 7.5 million bpd last week, down from 8 million bpd a week earlier. Production of middle distillates averaged 4.7 million bpd last week, compared with 4.8 million bpd a week earlier.
A day before the release of its weekly petroleum report, the EIA had some positive news for the oil world. The authority said in the latest edition of its Short-Term Energy Outlook that it expected oil demand to grow by 5.6 million bpd this year, after it shed 9 million bpd in 2020. However, demand growth will slow down in 2022, when the world will only add 3.3 million bpd to its daily demand.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Oil Bulls Are Back
- Asian Buyers Rush To Secure North Sea Oil After Saudi Surprise Cut
- Oil, Gas Rigs Increase For Seventh Straight Week