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The American Petroleum Institute (API) reported a huge draw of 10.23 million barrels in United States crude oil inventories, compared to S&P Global Platts survey of analysts who expected a draw of only 2.5 million barrels for the week ending July 21.
Gasoline inventories, on the other hand, bucked analyst traditions with a 1.903-million-barrel build for the week ending July 21, compared to analyst expectations that inventories for the fuel would fall by 1.25 million barrels.
Crude prices were up over 3 percent on Tuesday afternoon on expectations that the United States would see a drop in inventories, largely prompted by reports that Saudi Arabia is considering even deeper oil export cuts, particularly to the United States. Saudi Arabia-to-US oil exports were below 20 million barrels in June, down from 24.4 million barrels in May and 44 million barrels in December 2016, according to S&P Global Platts Oil Editor Jack Laursen.
At 4:00pm EST, WTI was trading up 3.32% at $47.88, with Brent crude trading up 3.25% at $50.18.
Gasoline was also trading up on the day before the data release, by 2.58% at $1.597.
Crude oil inventories in the US began its downward slide in early April, and have continued to fall, erasing nearly all of the inventory that was built between January and April. According to the API, today’s build brings the total inventory for crude oil in 2017 to a net draw of 7.534 million barrels—the first net draw for 2017 since January.
Related: Oil Markets Unimpressed By OPEC Meeting
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Distillate inventories fell this week, by 111,000 barrels, compared to analyst expectations of a 800,000-barrel draw.
Inventories at the Cushing, Oklahoma, site fell by 2.568 million barrels.
By 4:39pm EST, WTI was trading at $48.02, with Brent Crude trading at $50.29.
The U.S. Energy Information Administration report on oil inventories is due on Wednesday at 10:30 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.