Amid plunging oil prices pressured by the double weight of U.S. production and global economic growth projections, the Energy Information Administration reported a crude oil inventory draw of 500,000 barrels for the week to December 14, after a weekly draw of 1.2 million barrels a week earlier.
The EIA report comes a day after the American Petroleum Institute served one of its now regular surprises by reporting a build in inventories of 3.45 million barrels, which pressured prices further below US$50 a barrel for WTI and US$60 a barrel for Brent crude.
Refineries processed an average of 17.4 million barrels of crude oil daily last week, the EIA said, producing 10.3 million bpd of gasoline and 5.4 million barrels daily of distillate fuel. Gasoline inventories added 1.8 million barrels, while distillate inventories fell by 4.2 million barrels in the week to December 14.
Despite a more than 30-percent fall in benchmarks Brent and West Texas Intermediate in the past two months, today these recouped a fraction of their losses as the market seems to begin to calm down on better stock market performance.
The U.S. benchmark has been trading higher today, as “traders look for some solace in U.S. equity markets as risk sentiment appears to be stabilising,” Reuters quoted OANDA’s head of trading for the Asia-Pacific region, Steven Innes, as saying.
Yet, with the world’s top three producers still pumping at record rates—the U.S. at 11.7 million bpd, Russia and 11.42 million bpd, and Saudi Arabia above 11 million bpd—worries remain substantial, keeping the lid on prices.
These could get a respite next month when the OPEC+ cuts enter into effect, although this remains doubtful: the first OPEC+ deal to cut production lifted prices immediately, even before it took effect. Right now, even a production outage in Libya did not stop the price slide, which does not bode well for oil’s near-term prospects.
By Irina Slav for Oilprice.com
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