Crude oil prices inched higher, after the Energy Information Administration reported an inventory draw of 1.4 million barrels for the week to September 30. The EIA also reported large draws in fuel stocks.
The crude oil inventory change compared with a modest draw of 200,000 barrels for the previous week and it came after OPEC+ agreed a cut of 2 million barrels to daily production, which was also bullish for prices.
OPEC+ today agreed to reduce its combined production amid expectations of demand destruction because of the global economic slowdown, in an effort to prop up prices to more desirable levels.
The cut was larger than initially expected but in line with the latest reports from the OPEC+ camp ahead of the meeting that took place in Vienna today.
Oil price were already up strongly a day before the meeting, with analysts forecasting a production cut could push benchmark price back into three-digit territory as soon as the fourth quarter because of the already tight supply situation on international oil markets.
A day before the EIA published its weekly report, the American Petroleum Institute estimated crude oil inventories had shed 1.77 million barrels in the last week of September, with gasoline and middle distillate fuel inventories seen shedding even more in the reporting period.
Gasoline stocks were estimated to shed 4.7 million barrels in the last week of September, which compared with a draw of 2.4 million barrels for the previous week.
Gasoline production averaged 10 million barrels daily last week, which compared with 9.6 million bpd for the previous week.
In middle distillates, the EIA reported an inventory decline of 3.4 million barrels for the week to September 30, which compared with a decline of 2.9 million barrels for the previous week.
Middle distillate production averaged 5.2 million barrels daily last week, which compared with 5 million bpd a week earlier.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- OPEC+ To Cut Oil Production By 2 Million Barrels Per Day
- China Is Reselling U.S. LNG To Europe For Big Profits
- The LME Is Carefully Considering A Potential Ban On Russian Metals