Across The Board Draws Send Oil Prices Higher

The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 4.401 million barrels for the week ending August 7.

Analysts had predicted a modest inventory draw of 2.875-million barrels.

In the previous week, the API reported a considerable draw in crude oil inventories of 8.587 million barrels, after analysts had predicted a draw less than half that size.

Despite oil prices rising earlier in the day on Tuesday, WTI was trading down on Tuesday afternoon before the API’s data release as prices remain rangebound as OPEC’s cut delivers but the demand picture remains shrouded with uncertainty, even as the number of new coronavirus cases in the United States is now falling.

Oil production in the United States now appears to be leveling off after falling from 13.1 million bpd on March 13 to 11.0 million bpd on July 31, according to the Energy Information Administration.  

At 3:50 pm EDT on Tuesday, the WTI benchmark was trading down on the day by $0.32 (-0.76%) at $41.62—about $0.30 below last week’s levels. The price of a Brent barrel was trading down as well, by $0.44 (-0.98%), at $44.55—down about $0.20 per barrel than this time last week.

The API reported a draw of 1.310 million barrels of gasoline for the week ending August 7—compared to last week’s 1.748-million-barrel draw. This week’s draw compares to analyst expectations for a 674,000-barrel draw for the week.

Distillate inventories were down by 2.949 million barrels for the week, compared to last week’s 3.824-million-barrel build, while Cushing inventory was the only build this week, gaining 1.073 million barrels.

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At 4:33 pm EDT, WTI was trading at $41.55 while Brent was trading at $44.49.

By Julianne Geiger for Oilprice.com

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