Oil prices climbed higher today, after the Energy Information Administration reported a crude oil inventory draw of 3.7 million barrels for the week to March 31.
At 470 million barrels, inventories are about 4 percent above the five-year average for this time of the year, the authority said.
Last week’s draw compares with a draw of 7.5 million barrels estimated for the previous week, which helped push oil prices higher.
Of course, this week’s breaking news about OPEC+ deciding to reduce oil production by another million barrels daily had an even stronger effect on prices, pushing both Brent crude and West Texas Intermediate above $80 per barrel in a matter of hours.
Meanwhile, the EIA also reported an inventory decline in gasoline and another one in middle distillate inventories for the last week of March.
In gasoline, inventories fell by 4.1 million barrels in the period, with production averaging 9.9 million barrels daily.
This compared with an inventory draw of 2.9 million barrels for the previous week, with production then averaging 10 million barrels daily.
In middle distillates, the EIA estimated an inventory decline of 3.6 million barrels for the last week of March, with production at 4.7 million bpd.
This compared with a distillate stock build of 300,000 barrels for the previous week, when production averaged 4.6 million bpd.
Meanwhile, after the initial surge in prices on Monday, following the OPEC+ announcement, benchmarks stabilized, with Brent crude a bit over $84 a barrel and West Texas Intermediate at over $80 per barrel, slightly retreating from earlier today.
Analysts explained the stabilization with continued questions about the immediate future of oil demand.
"We will need to see demand hold and grow to push crude into the upper $80's," BOK Financial, senior vice president for trading Dennis Kissler told Reuters.
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The latest economic data from China and the United States has suggested a certain cooling in the rate of post-pandemic recovery, fueling the already existent worries about the prospects of oil demand later this year.
By Irina Slav for Oilprice.com
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