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Oil Prices Climb On Huge Inventory Draw

The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 8.537-million barrels for the week ending June 11.

Analysts had predicted a much smaller draw of 3.290 million barrels for the week.

In the previous week, the API reported a draw in oil inventories of 2.108 million barrels after analysts had predicted a draw of 2.036 million barrels. Crude oil inventories have fallen by more than 22 million barrels since the start of 2021, according to API data, but are still up 34 million barrels since January 2020.

WTI and Brent prices were up again on Tuesday as the market digests a new demand outlook that suggests oil could come roaring back in the second half of this year, despite earlier predictions that oil demand could take years to recover to pre-pandemic levels.

At 3:24 p.m. EST, WTI was trading up $1.34 (+1.89%) at $72.22 prior to the data release—up $2 per barrel on the week. Brent crude was trading up $1.24 per barrel (+1.70%) at $74.10 per barrel.

While crude oil inventories fell yet again this week, U.S. oil production rebounded to an average of 11.0 million bpd for the week ending June 4, according to the latest data from the Energy Information Administration. This is up 200,000 bpd from the week prior.

The API reported a build in gasoline inventories of 2.852 million barrels for the week ending June 11—on top of the previous week's 2.405-million-barrel build. Analysts had expected a draw of 614,000-barrel for the week.

Distillate stocks saw an increase in inventories this week of 1.956 million barrels for the week, on top of last week's 3.752-million-barrel increase.

Cushing inventories fell this week by 1.526 million barrels.

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Post data release, at 4:37 p.m. EDT, the WTI benchmark was trading at $72.27 while Brent crude was trading at $74.14 per barrel.

By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on June 16 2021 said:
    While Brent crude oil price surge has been gaining momentum long before the reported API’s draw because of the strength of the global oil demand, still a draw of that size could only aid the oil price momentum.

    Brent crude could hit $80 a barrel much earlier than my original projection of this happening in the third quarter of this year.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Paolo Fanton on June 16 2021 said:
    We should not be calling it a surprise. The demand for oil is higher than its ever been in history. The industry is set for its biggest boom ever. We saw this coming a long time ago.
  • George Doolittle on June 15 2021 said:
    This has been a remarkable run but to me more "remarkable for its stupidity" more than anything.

    Anyhow I think corn prices matter now as "this ain't wheat, the financial system ain't gold and your name ain't Leiter."

    Long $ibm International Business Machines
    Strong buy

    "Texas blackout 2.0" *SO* not a surprise.

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