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The American Petroleum Institute (API) reported a major draw of 9.2 million barrels in United States crude oil inventories—the biggest draw since September 2016.
The draw compares to analyst expectations of a draw of 3.6 million barrels for the week ending August 11.
Gasoline inventories rose by 301,000 barrels for the week ending August 11, compared to analyst expectations that inventories for the fuel would fall by 1.5 million barrels.
Crude prices fell on Tuesday—despite an export terminal closure in Libya on the back of worker protests—on weakening China demand. China’s oil refineries saw their lowest daily throughput in July at 10.71 million barrels per day according to China’s National Bureau of Statistics on Monday.
OPEC’s noncompliance also continues to weigh on traders, with OPEC’s MMOR last week showing a 172,600-barrel-per-day increase in oil production in July for the cartel, based on secondary sources. Total daily production for OPEC in July was 32.869 million bpd—up from 32.696 million bpd.
Traders are also watching US shale production, which is trudging on full steam ahead despite oil prices, which have been unable to hold above $50 for any significant length of time. Crude oil production in the United States reached 9.423 million bpd for the week ending August 4, with average crude oil production expecting to reach 9.91 million barrels per day in 2018 according to the EIA’s latest Short Term Energy Outlook.
Related: Oil Prices Inch Higher As Libya Closes Crude Export Terminal
At 8:19am, WTI had fallen 0.65% on the day to $47.28—almost $2 less than last week this time, with Brent Crude down 0.85% at $50.30. per barrel.
Distillate inventories were down by 2.1 million barrels, while inventories at the Cushing, Oklahoma site increased by 1.7 million barrels.
By 4:43pm EST, WTI had rallied slightly, trading at $47.81 with Brent Crude trading at $51.04.
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.
How is this the largest draw since September 2016?