The EIA reported a draw of 2.6 million barrels in U.S. commercial crude oil inventories, a day after the American Petroleum Institute shocked and unsettled oil markets with an estimated 4.68-million-barrel increase in inventories.
EIA’s official figures peg inventories at 483.2 million barrels, from 485.8 million barrels last week, when they declined by 2.4 million barrels. Analysts polled by the Wall Street Journal expected the EIA to report a draw of 1.7 million barrels.
The report comes amid growing worry among investors that OPEC members won’t be able – or willing – to comply with their new production quotas aimed at reducing total group production to 32.5 million bpd.
As history suggests, both OPEC and non-OPEC producers often find it hard or are simply unwilling to adhere to their commitments. What’s more, OPEC continued pumping full-force in November, which means that its initial cut target of 1.2 million bpd has now jumped to 1.7 million bpd, according to a fresh OPEC production report from the International Energy Agency.
The EIA also reported today that refineries in the U.S. processed an average daily of 16.5 million barrels of crude, operating at 90.5 percent of capacity and producing 9.8 million barrels of gasoline and 5 million barrels of distillate.
Gasoline inventories rose by 500,000 barrels in the seven days to December 9, exceeding the upper limit of the historical average for this time of year, while distillate inventories were down by 800,000 barrels on the week. Gasoline inventories have seen builds over the past five weeks, just as winter takes over and demand for the product declines. Related: The One Chart Showing The Real Cost Of US Energy
Imports stood at 7.4 million bpd, a decline on the previous week’s 8.3 million bpd.
Oil prices, already on the slide back to US$50 thanks to the growing investor concern over OPEC’s trustworthiness and November production figures that show increases, not decreases, are likely to experience a rebound after EIA’s report, though it will most likely be a short-lived one, as a growing number of observers note that the data that the agency reports does not reflect actual inventories of crude oil.
At the time of writing, WTI was changing hands at US$51.99 a barrel, and Brent crude was trading at US$54.97 a barrel, both benchmarks down by more than 1 percent.
By Irina Slav for Oilprice.com
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