The American Petroleum Institute (API) handed oil markets a sliver of hope this afternoon by reporting a sizeable draw of 5.764 million barrels in United States crude oil inventories, compared to analyst's expectations that this week would see a more modest 2.83-million-barrel draw for the week ending June 30.
And the market is in desperate need of that optimism, after prices fell sharply earlier today on reports that Russia is taking a rather tough stance against deeper OPEC/NOPEC production cuts.
At 4:06pm EST, WTI was trading down 4.42 percent at $44.99 per barrels, while the price of Brent crude had slid 3.89 percent to $47.68 per barrel. Gasoline was also trading down, by 2.51 percent at $1.496.
While today's drop in prices were significant, all three benchmarks were still trading higher than last Tuesday, and this week's API report of falling inventories almost across the board, which exceeded analyst expectations, may serve to assuage fears of lingering inventories that have steadfastly resisted OPEC's efforts to draw down.
This week's draw, according to the API, brings the total inventory build for crude oil in 2017 to just under 10 million barrels, with the last 10 weeks showing a total draw of 28.78 million barrels.
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Gasoline inventories for the week ending June 30 also fell substantially, by 5.7 million barrels, after adding 1.351 million barrels to inventory the week ending June 23. Surveyed analysts had expected a mere 500,000-barrel draw for the fuel this week.
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Distillate inventories rose again this week, this time by 375,000 barrels, after last week's 678,000-barrel build.
Inventories at the Cushing, Oklahoma, site fell this week as well, by 1.4 million barrels.
By 4:47pm EST, WTI was trading at $45.42, with Brent Crude trading at $48.07.
The U.S. Energy Information Administration report on oil inventories is due this week on Thursday at 11:00 a.m. EDT, due to the holiday week.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More