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The American Petroleum Institute (API) reported a draw of 1.83 million barrels in United States crude oil inventories, compared to analyst expectations that domestic supplies would see a smaller draw of .3 million barrels as refiners attempt to meet an increased appetite for gasoline.
Oil prices rose earlier on Tuesday on this expectation despite reports that Libya has returned between 200,000 bpd and 250,000 bpd of crude oil into production after last week it declared a force majeure of its Sharara crude from Libya’s Zawiya terminal and of Wafa condensate loadings from Mellitah terminal.
After a rocky start, by 3:34pm EST, WTI had climbed 1.53% to $51.01 per barrel, with Brent climbing 1.88% to $54.12 per barrel—a significant climb on mere rumors that a draw is anticipated, specifically given that Libya appears to be resuming its crude oil operations. For WTI, this is $2.67 over last week’s pre-report levels. For Brent, this was $2.80 above last week. Both benchmarks now stand at roughly the March 9th levels, before oil prices started its most recent slide.
This week’s draw in crude oil inventories is only the fifth draw in the last 14 weeks, according to API data. The chart below shows that the API is still reporting an overall hefty build over the previous 14 weeks of roughly 39.2 million barrels.
(Click to enlarge)
Inventories at the Cushing, Oklahoma, facility increased this week by 1.34 million barrels, marking the third build in the last four weeks.
What is sure to bolster markets is yet another draw in gasoline inventories this week, of 2.56 million barrels. This is on top of last week’s 1.10-million-barrel draw.
Distillates also saw a draw this week of 2.09 million barrels, on top of last week’s draw of almost the same amount.
Both benchmarks seemed to relish the news, with WTI trading at $51.17 a half hour post-report, while Brent was trading at $54.26. Tomorrow at 10:30am EST, the EIA will publish their own report concerning inventories.
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.