Oil Prices Head Higher After API Reports Huge Crude Draw

The American Petroleum Institute (API) reported a huge crude oil inventory draw 10.18 million barrels for the week ending December 7, compared to analyst expectations that we would see a draw in crude oil inventories of 2.990 million barrels.

Last week, the API reported a build of over 5 million barrels. A day later, the EIA had a completely contradictory report showing a 7.3-million-barrel draw.

Leading up to today's data release from the API, crude oil prices were trading modestly up at 2:27pm EST, with WTI up $0.45 (+0.88%) at $51.45 and Brent crude up $0.15 (+0.25%) at $60.12. The price hike of today is modest considering OPEC and non-OPEC's victory last week in reaching an agreement to cut production starting in January.

Inventories in the Cushing, Oklahoma facility this week had climbed by 642,000 barrels.

The API reported a draw in gasoline inventories for week ending December 7 in the amount of 2.484 million barrels. Analysts had predicted a build of 2.461 million barrels for the week.

US crude oil production as estimated by the Energy Information Administration was also bearish in nature, showing that production for the week ending November 30 stood 11.7 million bpd for a fourth week in a row.

Distillate inventories were up this week by 712,000 barrels, compared to an expected build of 1.801 million barrels.

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

By 4:35pm EST, WTI was trading up for the day at $51.74 and Brent was trading up at $60.36.

By Julianne Geiger for Oilprice.com

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