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Oil Continues Freefall Despite Large Crude Oil Inventory Draw

The American Petroleum Institute (API) reported another large crude oil inventory draw of 5 million barrels for the week ending June 27, a more ambitious draw than analysts had predicted, at 2.484-million barrels.

Last week, the API reported a draw of 7.55-million barrels. A day later, the EIA estimated that US inventories had drawn down by a much larger 12.8 million barrels.

The net build is 21.69 million barrels for the 27-week reporting period so far this year, using API data.

Oil prices were trading down significantly on Tuesday despite OPEC’s success at pulling a deal together to extend the production cuts into 2020. The hard-fought battle won, OPEC was unable to offset the dampened mood brought on by grim oil demand prospects and an unsettled US-China trade row.  

At 12:56pm EST, WTI was trading down by $1.92 (-3.25%) at $57.17—just $1.00 over last week’s levels. Brent was trading down $1.69 (-2.60%) at $63.37—also up roughly $1 over this time last week

The API this week reported a 387,000-barrel draw in gasoline inventories for week ending June 27. Analysts estimated a larger draw in gasoline inventories of 2.175-million barrels for the week.

Distillate inventories fell by 1.7 million barrels for the week, while inventories at Cushing rose by 882,000 million barrels.

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending June 21 fell again this week to 12.1 million bpd, the third such drop in as many weeks, and 300,000 bpd off the all-time high.

The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EST.

By 4:41pm EST, WTI had fallen nearly 5% on the day to $56.29 while Brent traded at $62.59.

By Julianne Geiger for Oilprice.com

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  • Tripp Mills on July 02 2019 said:
    Dear Author/Writer - thank you for posting (particularly on a day like we have seen today). Ok, earlier Brian (who decided he would just "roll" on over to OPEC - I mean I wont even go into how for a minute I thought he was a good journalist - bc he seemed to be better than what had been going on over night - however, look what happens (a 5% drop and he says demand is down) - so demand is down that means I should nt see "surprise" crude draws and that means oil/energy company's (oh I forgot about the bankruptcy filed I saw on here of yet another energy company - the era of bankrupt companies is that what people are trying to achieve - if so, good luck!) so that means "why a surprise crude draw" - put it back and all energy companies we just cut and don't increase production (remember economically recoverable). All the best, Tripp (i'm tired of shareholders, vc's, funds, etc. being decimated by the bs that has gone on). Oh, we just have to give cheap gas now (well guess what if you cant afford 4 dollars a gallon then don't drive then stay home!) So now I pay for everyones vacations (I haven't been on one in forever bc gosh knows I can't leave this computer for too long lmao! Tripp

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