A day after the American Petroleum Institute injected a bit of optimism among traders by reporting a crude oil inventory draw of 4.2 million barrels, the EIA once again poured cold water on the oil bulls by reporting a much smaller decline, of 900,000 barrels.
This is only the sixth inventory draw reported by the authority for the last 18 weeks.
Last week the EIA took markets by surprise, reporting a 3.6-million-barrel decline in inventories for the week to April 21, failing, however, to push prices much higher as pessimism about OPEC’s production cut extension still abounds.
In gasoline, the situation was pretty much the same. API estimated inventories in the week to April 28 had fallen by 1.9 million barrels, and the EIA refuted the estimate: according to it, gasoline inventories were up by 200,000 million barrels in the seven-day period.
Gasoline stockpile movements have proved time and again that they can affect international prices no less directly than crude oil stockpiles as they are potentially more clearly indicative of demand and supply trends in the world’s biggest consumer of the commodity.
Refineries, according to the EIA, processed an average 17.2 million barrels of crude last week, down slightly from 17.3 million bpd in the week before, operating at 93.3 percent of capacity. Gasoline production averaged 9.8 million barrels daily, up from 9.7 million bpd in the week to April 21.
Meanwhile, OPEC is preparing for an oil output cut extension, having been left with no other options as U.S. drillers continue adding rigs, clearly planning to keep on expanding their output as current international prices seem to suit them fine. This is, however, not the case with Middle Eastern producers, who, because of the cut, are losing market share to Iran and other producers.
The EIA figures could bring back a semblance of optimism, however, after the week started with a price slide as hedge funds and money managers started reducing their long positions on the commodity. Related: Saudis Further Discount Crude To Asia
At the time of writing, Brent crude traded at US$50.80 a barrel, and WTI was at US$47.91 a barrel.
By Irina Slav for Oilprice.com
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