Oil prices are on course…
Saudi Arabia’s surprise output cut…
The American Petroleum Institute (API) reported a sizable crude oil inventory draw of 6.127 million barrels for the week ending Jan 4, compared to analyst expectations that we would see a smaller draw in crude oil inventories of 3.300 million barrels.
Last week, the API reported a surprise crude draw of 4.5 million barrels. A day later, the EIA showed that inventories had remained virtually unchanged from the previous week.
Leading up to today’s data release from the API, crude oil prices were trading substantially up on the day and up on the week as hopes emerge that trade talks between China and the United States will end favorably, and as signs indicate that OPEC is doing its duty in curbing oil exports as part of the new production cut deal that went into effect at the first of the month.
At 12:38pm EST on Tuesday, WTI was trading up on the day $1.28 (+2.64%) per barrel at $49.80—a rise of more than $3 since the last API report. Brent crude was trading up $1.39 (+2.42%) at $58.72—also more than $3 on the week.
Inventories in the Cushing, Oklahoma facility this week climbed by 331,000 barrels.
Though this week’s crude oil draw was substantial, the API reported a large build in gasoline inventories for week ending January 4 in the amount of 5.5 million barrels. Analysts had predicted a build of 3.45 million barrels for the week.
US crude oil production as estimated by the Energy Information Administration showed that production for the week ending December 28 stayed at 11.7 million bpd for the week.
Distillate inventories increased this week by 10.2 million barrels, dwarfing the expected build of 2.7 million barrels.
The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EST, resuming its normal schedule after the holidays.
By 4:38pm EST, WTI was trading up at $49.72 and Brent was trading up at $59.65.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.