Oil Prices Drop As Gasoline Inventories Build

Crude oil inched down today after the Energy Information Administration reported an inventory draw of 900,000 barrels for the week to November 26. Fuel inventories, however, added a substantial amount.

At 433.1 million barrels, the authority said, crude oil inventories in the United States remain below the five-year seasonal average.

Last week's inventory move compares with a modest build of 1 million barrels for the previous week and a 2.1-million-barrel draw for the week before that.

In gasoline, the EIA estimated an inventory increase of 4 million barrels for Thanksgiving week, which compared with a decline of 600,000 barrels for the previous week and another draw, of 700,000 bpd for the week before that.

Gasoline production last week stood at an average of 9.6 million bpd, compared with 10.1 million bpd in the previous week.

In middle distillates, the EIA estimated a stock build of 2.2 million barrels for the week to November 26, which compared with a draw of 2 million barrels for the previous week.

Middle distillate production last week averaged 4.9 million bpd, which compared with 4.8 million bpd for the week earlier.

Refinery runs averaged 15.6 million bpd last week, which was almost unchanged on the previous week.

Oil prices slumped on Tuesday after the chief executive of Moderna said in an interview for the Financial Times that vaccine efficiency was questionable against the new omicron variant fresh out of Africa. This sparked intensified concern about the effect of the new coronavirus variant on the world's economic recovery and, consequently, oil demand.

Most investment banks remain bullish in crude, however, with the exception of Deutsche Bank, which this week in a note said it expected oil prices to drop in the first quarter of 2022 despite the possibility of OPEC+ pausing its production boost plan.

At the time of writing, Brent crude was trading at $71.44 a barrel, with West Texas Intermediate at $68.23 a barrel.

By Irina Slav for Oilprice.com

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