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OPEC Edges Closer To Production Agreement

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OPEC’s Agreement Sends Oil Prices Soaring

OPEC’s Agreement Sends Oil Prices Soaring

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Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw

oil tanker

Crude oil inventories are still coming down. The American Petroleum Institute (API) reported a huge draw of 7.130 million barrels in United States crude oil inventories, compared to an S&P Platts’ survey of analysts that expected inventories would draw down by 3.9 million barrels for the week ending October 13.

Gasoline inventories, according to the API, saw a surprise build of 1.941 million barrels for the week ending October 13, against an expected draw of 340,000 barrels.

Both WTI and Brent benchmarks were up on Monday on concerns that a US/Iran standoff could disrupt oil supplies, along with internal struggles in Iraqi Kirkuk oilfields as the referendum continues to pit Turkey, Iran, and Iraq governments against the Iraqi Kurds—a volatile situation that could spark a civil war. A further boost to oil prices came as Gulf Coast oil production continued to see significant disruptions through last week caused by Hurricane Nate.

But prices started to slip on Tuesday as reality set in as robust supply capacity from OPEC and US shale loomed large in skittish investor minds.

The WTI benchmark was still up .17% on the day to $51.96 at 3:00 pm EST, while Brent was trading up .43% on the day at $58.07. Both benchmarks are up week on week as well. Gasoline was trading up 0.99% on Tuesday at $1.62.

Related: Oil Fundamentals Overturn Geopolitical Risk

For the U.S., the total drawdown of crude oil in 2017 now stands at 30.6 million barrels, according to API data, although prices are still whipsawed from week to week on OPEC and geopolitical news.

Distillate inventories increased this week, up 1.644 million barrels. Analysts had expected a drop of 2.0 million barrels.

Inventories at the Cushing, Oklahoma, site decreased by 151,000 barrels this week.

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

By Julianne Geiger for Oilprice.com

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