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Oil Prices Jump On Major Crude Draw

Crude oil inventories sagged by another 7.85 million barrels, American Petroleum Institute (API) data showed on Tuesday, after dropping 4.2 million barrels in the week prior. Analysts anticipated a 2.487 million barrel draw.

U.S. crude inventories may have grown by roughly 13 million barrels so far this year, according to API data, but crude stored in the nation’s Strategic Petroleum Reserves sunk by nearly 16 times that figure so far this year— by 204 million barrels.

The SPR now contains the least amount of crude oil since March 1984.

The draw in commercial crude oil inventories came as the Department of Energy released 1.4 million barrels from the Strategic Petroleum Reserves in the week ending November 25, leaving the SPR with just 389.1 million barrels.

In the week prior, the API reported a large draw in crude oil inventories of 4.2 million barrels.

WTI prices continued to increase on Tuesday as the market digests the likelihood that OPEC+ may cut production for January at its December meeting to lift falling prices.

At 10:26 a.m. EST, WTI was trading up $1.85 (+2.40%) on the day at $79.09 per barrel. This is a decrease of roughly $2 per barrel from the prior week. Brent crude was trading up $2.05 (+2.46%) on the day at $85.24—a decrease of roughly $3 per barrel on the week.

U.S. crude oil production stayed at 12.1 million bpd for the third week in a row for week ending November 18, 400,000 bpd more than the levels seen at the start of the year, and still a 1 million bpd shortfall from the levels seen at the start of the pandemic.

The API reported a build in gasoline inventories this week of 2.85 million barrels for the week ending November 25, after the previous week’s 400,000-barrel draw. 

Distillate stocks also saw a build this week, of 4.01 million barrels, compared to last week’s 1.1-million-barrel increase.

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Cushing inventories fell 150,000 barrels in the week to November 25, compared to last week’s reported decrease of 1.4 million barrels.

WTI was trading at $78.72 shortly after the data release.

By Julianne Geiger for Oilprice.com

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