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The American Petroleum Institute (API) reported a large draw of 7.382 million barrels of United States crude oil inventories for the week ending December 8, making two large draws in back to back weeks. Analysts had expected a much smaller drawdown of 3.759 million barrels.
Last week, the American Petroleum Institute (API) reported a large draw of 5.481 million barrels of crude oil, but had dampened any enthusiasm that the oil bulls may have had by countering that with a massive build of 9.196 million barrels of gasoline.
This week, the API is reporting another build in gasoline inventories, but this time more moderate, at 2.334 million barrels for the week ending December 8. The results came in very close to forecasts for a 2.457-million-barrel build.
Brent crude had jumped in late afternoon trading on Monday and early Tuesday, as reports came in that the Forties pipeline would be shut down for an unspecified timeframe after a crack had been discovered.
By Tuesday afternoon at 2:19pm EST, both benchmarks were trading down, with WTI down 1.52 percent ($-0.88) at $57.11 and Brent crude down 2.13 percent (-1.38) at $63.31. Both benchmarks were up from last Tuesday.
Distillate inventories, too, saw another build this week, up 1.538 million barrels, against a forecast of a 902,000-barrel build. Distillate inventory has risen three weeks in a row leading up to this week, according to information by the Energy Information Administration, but are still almost 30 million barrels shy of the same week last year.
Inventories at the Cushing, Oklahoma, site decreased by 2.704 million barrels this week.
The dip in U.S. crude oil inventories comes after weeks and weeks of increasing oil production in the United States, growing from an average of 8.946 million bpd in the first week of January of this year and reaching an average of 9.707 million bpd for week ending December 1.
The U.S. Energy Information Administration report on oil inventories is due to be released on Wednesday at 10:30 a.m. EDT.
Shortly after data release, the WTI benchmark was down 1.29 percent on the day to $57.24 at 4:36pm EST. Brent was trading down 1.76 percent on the day at $63.55.
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.