• 3 hours Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 5 hours Venezuelan Output Drops To 28-Year Low In 2017
  • 7 hours OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 10 hours Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 11 hours Kinder Morgan Delays Trans Mountain Launch Again
  • 12 hours Shell Inks Another Solar Deal
  • 1 day API Reports Seventh Large Crude Draw In Seven Weeks
  • 1 day Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 1 day EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 1 day IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 1 day Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 1 day Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 1 day Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 1 day Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 2 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 2 days Norway Grants Record 75 New Offshore Exploration Leases
  • 2 days China’s Growing Appetite For Renewables
  • 2 days Chevron To Resume Drilling In Kurdistan
  • 2 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 2 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 2 days Nigeria Among Worst Performers In Electricity Supply
  • 3 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 3 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 3 days Saudis To Award Nuclear Power Contracts In December
  • 3 days Shell Approves Its First North Sea Oil Project In Six Years
  • 3 days China Unlikely To Maintain Record Oil Product Exports
  • 3 days Australia Solar Power Additions Hit Record In 2017
  • 3 days Morocco Prepares $4.6B Gas Project Tender
  • 4 days Iranian Oil Tanker Sinks After Second Explosion
  • 6 days Russia To Discuss Possible Exit From OPEC Deal
  • 6 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 6 days Kenya Cuts Share Of Oil Revenues To Local Communities
  • 6 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
  • 6 days Russia’s Lukoil May Sell 20% In Oil Trader Litasco
  • 6 days Falling Chinese Oil Imports Weigh On Prices
  • 6 days Shell Considers Buying Dutch Green Energy Supplier
  • 7 days Wind And Solar Prices Continue To Fall
  • 7 days Residents Flee After Nigeria Gas Company Pipeline Explodes
  • 7 days Venezuela To Pre-Mine Petro For Release In 6-Weeks
  • 7 days Trump Says U.S. “Could Conceivably” Rejoin Paris Climate Accord
The Most Feared Businessman In Russia

The Most Feared Businessman In Russia

No politician or businessman is…

Is An Oil Price Spike Inevitable?

Is An Oil Price Spike Inevitable?

Oil prices have rallied recently…

Oil Prices Inch Lower After API Reports Strong Crude Draw

oil industry

Oil prices fell on Wednesday from 2.5-year highs in anticipation of the U.S. crude inventory data reports.

The American Petroleum Institute (API) reported a draw of 6.0 million barrels of United States crude oil inventories for the week ending December 22, marking four large draws in as many weeks. Analysts had expected a smaller drawdown of 3.97 million barrels of the fuel.

Supply risk has increased in 2017 as a side-effect of the OPEC output cut deal, and disruptions now have a much stronger effect on oil prices in a quickly tightening market. Outages in Libya and the North Sea have pushed prices upward in recent days, with WTI briefly surpassing the $60 milestone.

On the flipside, the Permian Basin, U.S.’ most prolific shale patch, has beaten its own production record, pumping an estimated 815 million barrels of crude this year. U.S. shale producers expect to further boost output in 2018, soaring above 10.5 million bpd.

In the short term, however, increased production hasn’t led to a surge in U.S. crude inventories. In fact, analysts polled by S&P Global Platts predicted a drop in crude inventories for the fourth consecutive week, and were confirmed by this week’s API report.

Last week, the American Petroleum Institute (API) reported a large draw of 5.222 million barrels of crude oil, along with an increase in gasoline inventories of 2.001 million barrels.

This week, the API is reporting another strong build in gasoline inventories at 3.1 million barrels for the week ending December 22. The results came in close to forecasts for a 1.278-million-barrel build.

Related: Chinese Ships Caught Illegally Selling Oil To North Korea

Distillate inventories saw a surprise build this week of 2.8 million barrels, against a forecast of a 584,000-barrel draw.

Inventories at the Cushing, Oklahoma, site decreased by 1.3 million barrels this week.

The dip in US crude oil inventories comes after weeks and weeks of increasing oil production in the United States, growing from an average of 8.946 million bpd in the first week of January of this year and reaching an average of 9.789 million bpd for week ending December 15.

The U.S. Energy Information Administration report on oil inventories is due to be released on Thursday at 11:00 a.m. EDT due to the Christmas holiday.

By 4:43pm EST, the WTI benchmark was trading down 0.63% on the day to $59.59 while Brent was trading down 0.96% on the day at $65.82.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Mamdouh G Salameh on December 27 2017 said:
    Despite efforts by vested interests including the IEA and the EIA, the price of oil rocketed to more than $66 a barrel. The oil price could be heading towards $70/barrel or even higher during 2018 underpinned by positive oil market fundamentals.

    And without fail, every time the oil price goes up, vested interests come up with claims intended to dampen the oil price such as a projected rise in US shale oil production to 10.5 million barrels a day (mbd) in 2018.

    While the US shale production has enabled the United States to reduce its oil imports, there has been a lot of hypes about it.

    1- The US shale oil industry will never be a profitable industry. US shale oil producers are so deeply in debt that they have become like the saying of “robbing Peter to pay Paul”. They are heavily indebted to Wall Street to the extent that they continue to produce oil even at a loss just to pay some of their outstanding debts.

    2- Because of a very high depletion rate estimated at 70%-90%, US shale producers have to spend billions every year to drill thousands of wells just to maintain production. In so doing they sink deeper and deeper in debt.

    3- US shale oil producers claim credit for the glut in the market since 2014 when in fact it was Saudi Arabia and OPEC members who caused the glut by producing more than 2 mbd above their production quotas.

    4- Sometime in the foreseeable future, there may not be any shale plays in the United States from where to produce oil.

    5- Threatening the oil price with claims about US shale oil production has lost its impact on oil prices. The global oil market has already seen through that ploy. The proof is the rise in oil prices which is projected to go beyond $70/barrel in 2018 and $100 by 2020.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News