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The American Petroleum Institute (API) reported a crude oil inventory draw of 6.024 million barrels for the week ending July 25, compared to analyst expectations of a much smaller, 1.818-million barrel draw.
The inventory draw this week compares to last week’s massive draw of 10.961 million barrels in what was the largest inventory draw this year, according to the API. A day later, the EIA confirmed an inventory drawdown of 10.8 million barrels.
After today’s inventory move, the net result is a draw for the year at -4.83 million barrels for the 31-week reporting period so far, using API data.
Oil prices were trading up on Tuesday on expectations of a Fed rate cut and escalating tensions in the Persian Gulf as Iran and Russia sign an MoU to conduct drills in the Gulf and as the US and the UK seek to buddy up to ensure safe travels through the area. Weakening demand growth is capping gains.
At 11:38am EST, WTI was trading up by $0.38 (+0.67%) at $57.25—roughly $.50 above last week’s spot price. Brent was trading up $0.51 (+0.80%) at $64.13—less than a $0.50 increase.
The API this week reported a 3.135-barrel draw in gasoline inventories for week ending July 25. Analysts predicted a draw in gasoline inventories of 1.449-million barrels for the week.
Distillate inventories fell by 890,000 barrels for the week, while inventories at Cushing fell by 1.4494-million barrels.
US crude oil production as estimated by the Energy Information Administration showed that production for the week ending July 18 fell sharply this week to 11.3 million bpd, 1.1-million bpd off the all-time high hit earlier this year.
The U.S. Energy Information Administration report on crude oil inventories is due to be released at its regularly scheduled time on Wednesday at 10:30a.m. EST.
By 4:41pm EST, WTI was trading at $58.25 while Brent traded at $64.88.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.