Oil prices took another plunge today after the Energy Information Administration reported a crude oil inventory decline of 400,000 barrels for the week to August 6, significantly less than expected.
This compared with an unexpected build of 3.6 million barrels reported for the previous week that weighed prices down last week.
It also compares with a modest inventory draw of a little over 800,000 bpd estimated by the American Petroleum Institute, reported a day earlier.
Analysts had expected an inventory draw of 1.05 million barrels for the first week of August.
Brent crude was trading at $69.90 per barrel at the time of writing, with West Texas Intermediate at $67.67 per barrel, both down from opening, after the White House called on OPEC to raise production amid soaring gasoline prices.
In gasoline, the EIA estimated an inventory draw of 1.4 million barrels, which compared with a hefty draw of 5.3 million barrels for the previous week.
Gasoline production averaged 10 million bpd last week, which compared with 10.2 million bpd a week earlier as travel continued to rebound despite the rise in Covid-19 infections in most of the U.S.
In middle distillates, the EIA estimated an inventory rise of 1.8 million barrels for the week to August 6, which compared with a build of 800,000 barrels for the previous week. Related: France Pressures Iran To Rejoin The Nuclear Deal
Middle distillate production averaged 4.9 million bpd in the first week of August, which was a slight increase on a week earlier.
Oil started the week with a decline as the latest Covid-19 wave prompted worry about demand prospects, reinforced by concern about Chinese demand specifically as the country imposes movement restrictions to stem the spread of infection.
Yesterday, however, benchmarks ended trading with gains, reflecting renewed optimism among traders following the U.S. Senate's passage of a $1-trillion infrastructure bill that should be favorable for oil demand.
"Crude prices are rebounding as the rout that stemmed from delta variant concerns has run its course," MarketWatch quoted Oanda senior market analyst Edward Moya as saying.
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