The American Petroleum Institute (API) reported on Tuesday a major draw in crude oil inventories of 8.01 million barrels for the week ending October 30.
Analysts had predicted an inventory build of 890,000 barrels.
In the previous week, the API reported a surprise build in oil inventories of 4.577-million barrels, after analysts had predicted a draw of 1.11 million barrels.
Oil prices were trading up on Tuesday afternoon before the API's data release in the runup to the U.S. election. Bearish factors this week include a ramp-up of oil production in OPEC producer Libya, the resolution to the latest storm that has disrupted oil and gas production on the U.S. Gulf Coast over the last week, and additional lockdowns in Europe.
In the runup to Tuesday's data release, at 2:07 p.m. EDT, WTI had risen by $0.97 (+2.64%) to $37.77, down roughly $2 per barrel on the week. The Brent crude benchmark had risen on the day by $0.89 at that time (+2.28%) to $39.86-down roughly $1.50 on the week.
Oil production in the United States rose last week, closing the gap between production this week and the all-time high this year down to 2.0 million barrels per day. U.S. oil production currently sits at 11.1 million bpd, according to the Energy Information Administration.
The API reported a surprise build in gasoline inventories of 2.45-million barrels of gasoline for the week ending October 27-compared to the previous week's 2.252-million-barrel build. Analysts had expected an 871,000-barrel draw for the week.
Distillate inventories were down by 577,000 barrels for the week, compared to last week's 5.333-million-barrel draw, while Cushing inventories rose by 981,000 barrels.
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At 4:54 pm EDT, the WTI benchmark was trading at $38.10 while Brent crude was trading at $40.11.
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. More