Crude oil price rallied further today after the Energy Information Administration reported a crude oil inventory draw of 4.7 million barrels for the week to August 21.
At 507.8 million barrels, oil inventories are 15 percent above the five-year average for this time of the year. Last week's draw compares with a 1.6-million-barrel decline in inventories for the previous week.
Analysts had expected an inventory draw of 3.833 million barrels for the week to August 21. The American Petroleum Institute yesterday estimated crude oil inventories had shed 4.524 million barrels in the reported period.
In gasoline, the EIA estimated an inventory draw of 4.6 million barrels, compared with a decline of 3.3 million barrels a week earlier that sparked hopes the excessive supply of gasoline was being drained by recovering demand for fuels. Gasoline production last week averaged 9.5 million bpd, up from 9.4 million bpd in the previous week.
In distillate fuels, the EIA reported an inventory increase of 1.4 million barrels, after a modest build of 200,000 barrels a week earlier. Distillate fuel production rose last week, to 5.1 million bpd, compared with 4.7 million bpd a week earlier.
Refineries processed 14.7 million bpd of crude last week, after run rates fell to 14.5 million bpd during the previous week. This week the numbers would likely be even lower as hurricane Laura forced the shutdown of several facilities on the Gulf Coast.
The hurricane threat has been, as usual, bullish for oil prices but the rally it sparked has been hesitant, with prices reversing their rise just a few hours after it started. This suggest the downward risks related to growing production, the continuing fast spread of coronavirus infections in some key markets, and sluggish demand recovery remain quite significant and capable of offsetting the effects of bullish events.
At the time of writing, Brent crude was trading at $46.00 a barrel and West Texas Intermediate was changing hands at $43.73 a barrel.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More