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The American Petroleum Institute (API) reported a huge draw of 8.133 million barrels in United States crude oil inventories, compared to analyst’s expectations that this week would see a much more modest draw of 2.99 million barrels for the week ending July 7.
At 4:13pm EST, WTI was trading up 1.53% at$45.08, less than 10 cents per barrel over last week’s prices of $44.99. Brent crude was trading up 1.45% at $47.56, roughly 10 cents per barrel down from last week’s levels.
Gasoline was also trading up on the day, by 1.46% at $1.5181.
Today’s price increases is due in large part to the Energy Information Administration’s revised forecast that U.S. oil production would produce 9.9 million barrels daily in 2018—down from its previous forecast of 10 million bpd. While the downward revision has afforded the market a break from falling prices, a reduction to 9.9 million barrels per day for 2018 US crude oil production would still be the highest annual average output on record, and is unlikely to prop up prices substantially in the long term.
This week’s draw, according to the API, brings the total inventory build for crude oil in 2017 to just over 1 million barrels.
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Gasoline inventories for the week ending July 7 also fell modestly, by 801,000 barrels, after falling 5.7 million barrels the week ending June 30. Surveyed analysts had expected a pessimistic 1.1-million-barrel build for the fuel this week.
Distillate inventories rose again this week, this time by 2.079 million barrels, on top of last week’s 375,000-barrel build. Analysts had predicted a 1.1-million-barel build.
Related: Oil Rises Despite Gloomy Outlook
Adding to this week’s optimism, inventories at the Cushing, Oklahoma, site also fell, by 2.028 million barrels.
By 4:39pm EST, WTI was trading at $45.09, with Brent Crude trading at $47.57.
The U.S. Energy Information Administration report on oil inventories is due ton Wednesday at 10:00 a.m. EDT.
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.