Crude oil prices jumped higher after the Energy Information Administration reported crude oil inventories in the U.S. had shed 7.3 million barrels in the week to February 12.
This compared with an inventory draw of 5.5 million barrels for the previous week, as estimated by the EIA.
The American Petroleum Institute had a day earlier seen crude oil inventories down 5.8 million barrels for the week to February 12.
Analysts had expected an inventory draw of 2.175 million barrels for the reporting period.
The EIA also reported a build in gasoline stocks for last week, at 700,000 barrels. This compared with a build of 4.3 million barrels for the previous week. Production averaged 9 million bpd, compared with 8.7 million bpd a week earlier.
This week and next will likely see further hefty gasoline inventory draws due to the refinery outages caused by the Texas freeze. According to industry estimates, more than 3 million bpd in refining capacity is off because of power outages and freezing.
In middle distillates, the EIA reported an inventory decline of 3.4 million barrels for last week, which compared with a draw of 1.7 million barrels for the previous week.
Distillate production averaged 4.6 million bpd last week, down from 4.7 million bpd a week earlier.
Like gasoline, distillates are also likely to see major draws this week and next as refineries take time to return to normal operation once power supply recovers in Texas.
Brent crude was trading at $64.06 a barrel at the time of writing, and Wet Texas Intermediate was changing hands at $60.85 a barrel, both pushed higher by the Texas freeze that slashed total U.S. oil production by as much as 40 percent, according to trader and industry estimated cited by Bloomberg earlier this week.
Prices may go further still as the resumption of normal production rates will take a while even after the cold spell in Texas ends and temperatures return to normal for this season.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Is This Oil Rally The Start Of Something Much Bigger?
- Texas Winter Storm Highlights The Importance Of Fossil Fuels
- What The Media Isn’t Telling You About Texas Blackouts
We shall indeed find out in the coming days and indeed weeks and Months as "cheap for a reason" suddenly and spectacularly becomes validated for all to see.