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Oil Shoots Up On Huge Crude Inventory Draw

Crude oil prices moved further up today after the U.S. Energy Information Administration reported a crude oil inventory decline of 12.6 million barrels for the week to November 25.

At 419.1 million barrels, oil inventories are 8 percent below the five-year average for this time of the year.

Last week’s inventory move compared with a draw of 3.7 million barrels estimated for the previous week.

In fuels, the EIA estimated inventory builds.

Gasoline inventories added 2.8 million barrels in the reporting period, with production averaging 9.4 million bpd.

This compared with a build of 3.1 million barrels for the previous week, with production at 9.2 million barrels daily.

In middle distillates, the EIA reported an inventory increase of 3.5 million barrels for the week to November 25, with production averaging 5.3 million bpd.

This compared with an inventory build of 1.7 million barrels for the previous week and production of 5.1 million bpd.

Meanwhile, oil prices have been on the mend after a sharp drop at the start of this week amid Chinese protests against Covid restrictions. Countering demand concerns related to the Covid situation in China, there have been reports that OPEC+ might discuss deeper production cuts at its upcoming meeting on Sunday.

This has prompted at least one investment bank to reiterate its bullish forecast for oil prices despite the recent decline. According to Jeffrey Currie, the head of commodities at Goldman Sachs, Brent crude could yet rise to $110 per barrel next year.

At the same time, the head of the International Energy Agency has called on OPEC to consider the “fragile” state of the global economy at its next meeting, warning that some of the cartel’s biggest clients were n the brink of a recession.

At the time of writing, Brent crude was trading at $85.37 per barrel, with West Texas Intermediate at $80.90 per barrel. Both were up from opening.

By Irina Slav for Oilprice.com

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Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More