Oil Prices Soar On Surprise Crude Draw

The American Petroleum Institute (API) on Tuesday reported its first crude oil inventory draw in six weeks, even as the United States ventures well on the other side of the typical driving season. This week, the API estimated the inventory draw for crude oil to be 2.485 million barrels.

Despite the six previous weeks of builds, U.S. crude inventories are still 60 million barrels below where they were at the beginning of the year—and low enough to continue to press upwards on prices.

Analyst expectations for the week were for a build of 1.90-million barrels for the week.

In the previous week, the API reported a build in oil inventories of 3.594-million barrels, compared to the 1.567-million-barrel build that analysts had predicted.

Oil prices were trading up on Tuesday in the runup to the data release, with WTI rising to $83.96 and Brent trading around $84.57 per barrel. WTI was up less than $.50 week on week at 2:13 p.m. EST, while Brent was essentially flat on the week.  

U.S. oil production for the week ending October 29—the last week for which the Energy Information Administration has provided data—rose 200,000 bpd to 11.5 million bpd—still 1.6 million bpd below the all-time high of 13.1 million bpd reached right before the pandemic took hold in the United States.

The API reported a draw in gasoline inventories as well, of 552,000 barrels for the week ending November 5—compared to the previous week's 552,000-barrel draw.

Distillate stocks saw an increase in inventories of 573,000 barrels for the week, on top of last week's 573000-barrel increase.

By Julianne Geiger for Oilprice.com

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