Large Crude, Gasoline Draws Send Oil Prices Up

The American Petroleum Institute (API) reported a huge draw this week for crude oil of 6.53 million barrels. U.S. crude inventories have grown by roughly 25 million barrels so far this year, according to API data, while the U.S. Strategic Petroleum Reserves fell by more than seven times that figure, at 194 million barrels.

The draw in crude oil inventories was despite the Department of Energy's release of 1.9 million barrels from the Strategic Petroleum Reserves in the week ending October 28, leaving the SPR with 399.8 million barrels.

In the week prior, the API reported a build in crude oil inventories of 4.520 million barrels.

WTI rose on Tuesday. Moments before the data release at 4:30 p.m. ET, WTI was trading up $1.75 (+2.02%) on the day at $88.28 per barrel. This is an increase of roughly $3 per barrel from the prior week. Brent crude was trading up $1.71 (+1.84%) on the day at $94.52-an increase of more than $1 on the week.

U.S. crude oil production has remained flat for months. For the week ending October 21, U.S. crude oil production stayed at 12 million bpd, according to the latest weekly EIA data, within the same 11.9-12.1 million bpd range it has been in since the beginning of summer. At 12 million bpd, U.S. crude production is just a 300,000 bpd rise from the levels seen at the start of the year, and still a 1.1 million bpd shortfall from the levels seen at the start of the pandemic.

The API reported a draw in gasoline inventories this week of 2.64 million barrels for the week ending October 21, compared to the previous week's 2.278 million-barrel draw. 

Distillate stocks saw a build this week of 865,000 barrels, compared to last week's 635,000-barrel increase.

Cushing inventories rose 883,000 barrels in the week to October 28. In the week prior, the API saw a Cushing increase of 70,000 barrels.

By Julianne Geiger for Oilprice.com

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