A day after crude slid on API’s report of a 2.68-million-barrel build in gasoline inventories in the U.S., the EIA injected a modest amount of optimism into markets by reporting a 1.3-million-barrel decline in crude oil stockpiles for the week to November 18.
Last week, the EIA reported an increase in crude oil inventories of 5.3 million barrels, which failed to have any big effect on prices, which were still riding the wave of the U.S. presidential election results from the previous week.
This week, a Bloomberg poll had crude oil inventories up by 1 million barrels, after the API estimated 1.28 million barrel draw yesterday.
According to the EIA, at 489 million barrels, crude oil stockpiles are at the upper limit for this time of year. Gasoline inventories were up by 2.3 million barrels in the week to November 18, largely confirming API data.
Refineries processed 16.4 million barrels of crude daily, a 271,000-barel increase on the week, producing 9.7 million barrels of gasoline and 5.1 million barrels of distillate.
The EIA’s figures, upbeat as they may seem, are again not very likely to push prices strongly in any direction as markets are holding their breath for the final OPEC meeting, due to take place next Wednesday. Related: Obama Scraps Arctic Drilling Ahead Of Trump Presidency
It’s hard to tell which end is up, with the Technical Committee appointed by the cartel signaling the negotiations on the individual production quotas for each OPEC member were “going well,” while Iraq and Iran hold fast—although the situation is extremely fluid.
It’s worth remembering that the committee has no power to impose quotas; it can only make a recommendation on how the production cap that is being discussed will be implemented.
At 10:20AM EST, Brent crude was trading at US$48.96 a barrel and WTI was at US$47.79 a barrel.
By Irina Slav for Oilprice.com
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