The latest American Petroleum Institute (API) report published on 21 June 2016 indicated a bigger-than-expected draw on U.S. oil inventory.
As reported by CNBC, U.S. crude stocks nosedived during the week ending on 17 June including the draw from at the Cushing Oil Hub in Oklahoma. The API in its latest weekly analysis noted a drop in gasoline and distillate inventories.
Prior to the publication of the study, sources cited by MarketWatch claimed U.S. crude supplies plummeted by 5.2 million barrels from 13 June to 17 June. Analysts polled by S&P Global Platts predicted a dip of 1.4 million barrels for crude inventories, while the U.S. government data from the U.S. Energy Information Administration (EIA) could show a nationwide draw of 1.9 million barrels for the week.
The information from the API thus represents a turnaround from the build at 1.2 million barrels reported by the group for the week ending on 10 June, and follows a draw of 3.56 million barrels the week before that.
In anticipation of the API report, oil futures prices on 21 June reversed course and broke a three-session winning streak. WTI crude oil for August delivery lost 0.38 percent and closed at US$49.77 per barrel. Brent crude, meanwhile, only fell by 0.2 percent to close the day at US$50.55 per barrel. Furthermore, the spread between the international and U.S. benchmarks of crude stood at US$0.78, which is slightly above the previous day's level of US$0.69 at the close of trading.
The gains in oil futures occurred despite continued investor anxiety over the Brexit referendum scheduled for 23 June, as well as conflicting information over an alleged thirty-day ceasefire by the separatist Niger Delta Avengers fighting in Nigeria's Southern Delta region.
By Erwin Cifuentes for Oilprice.com
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Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.… More