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The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 6.360 million barrels for the week ending August 28.
Analysts had predicted an inventory draw of 1.887-million barrels.
In the previous week, the API reported a draw in crude oil inventories of 4.524 million barrels, after analysts had predicted a smaller draw of 3.694 million barrels.
While OPEC has had significant success with its oil production cut pact, global oil demand is still significantly down, and market analysts are not expecting a quick return. U.S. inventory moves remain a closely watched metric to determine the current state of the market.
Oil prices were trading up on Tuesday afternoon before the API’s data release, and at 2:39 pm EDT, WTI had risen by $0.14 (+0.33%) to $42.75—about $0.65 under last week’s levels. The Brent crude benchmark had risen by $0.30 (+0.66%) to $45.58, $0.40 under last week’s levels.
Oil production in the United States rose slightly this week, still down significantly from a high of 13.1 million bpd on March 13. U.S. oil production currently sits at 10.8 million bpd as of August 21, according to the Energy Information Administration—2.3 million bpd under March highs.
The API reported a large draw in gasoline inventories too, of 5.761 million barrels of gasoline for the week ending August 28—compared to last week’s 6.392-million-barrel draw. Analysts had expected a much smaller 3.036-million-barrel draw for the week.
Distillate inventories were down by 1.424 million barrels for the week, compared to last week’s 2.259-million-barrel build, while Cushing inventory fell by 237,000 barrels.
At 4:32 pm EDT, the WTI benchmark was trading at $42.75 while Brent crude was trading at $45.58.
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.