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The American Petroleum Institute (API) reported a draw of 1.5 million barrels in United States crude oil inventories, compared to analyst expectations that markets would see a draw of 2.3 million barrels for the week ending May 19—the second such expectation in two weeks. While 1.5 million barrels is not a huge draw, this week’s crude oil inventory draw was accompanied by across the board draws for gasoline, distillates, and oil at the Cushing, Oklahoma facility as well.
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Gasoline inventories fell by a sizable 3.15 million barrels, according to the API.
Oil prices have risen this week, from WTI at $48.76 last week to $51.41 this week, at 2:27pm EST on Tuesday. Brent was trading at $54.11 at 2:27pm EST, compared to $51.78 last week. Both benchmarks have gained +$5.00 over the last two weeks.
Still, oil prices are hanging precariously in the balance, with OPEC pulling the strings on one side, and US inventories and rig count the other. OPEC has made a good showing of managing expectations—struggling to find the balance between 1) promising enough to keep oil from falling to levels we saw two weeks ago and 2) not promising so much that markets are disappointed with a mere follow through, thus leaving space to exceed expectations—the only move left that will lift prices.
Gasoline prices were up at 2:35pm EST 0.05% at $1.66—up almost 6 cents from last week, and 18 cents over the last two weeks.
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Distillate inventories fell this week by 1.85 million barrels—offsetting almost perfectly the 1.8 million barrel build last week. Inventories at the Cushing, Oklahoma, site fell by 210,000 barrels.
By 4:40pm EST, both WTI and Brent Crude were upwardly mobile on the news, and were trading at $51.68 and $54.34 respectively.
The U.S. Energy Information Administration report on oil inventories is due 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.