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The rally in oil prices took a breather today after the Energy Information Administration reported a crude oil inventory draw of 400,000 barrels for the week to May 7.
This compared with a draw of 8 million barrels reported for the previous week—the largest decline in U.S. crude oil stocks since January.
Analysts had expected an inventory draw of 2.8 million barrels for the reporting period.
In gasoline, the EIA reported an inventory build of 400,000 barrels for the week to May 7, which compared with two modest consecutive weekly builds of 100,000 barrels and 700,000 barrels, respectively.
Gasoline production averaged 9.6 million bpd last week, compared with 9.1 million bpd a week earlier.
In middle distillates, the EIA estimated an inventory decline of 1.7 million barrels for the week to May 7, which compared with a decline of 2.9 million barrels for the previous week and a draw of 3.3 million barrels for the last week of April.
Middle distillate production last week averaged 4.7 million bpd, which compared with 4.5 million bpd the week before and 4.6 million bpd in the last week of April.
Production of both gasoline and distillates may be disrupted this week due to the outage of the Colonial Pipeline network, which is already causing fuel shortages along the East Coast because of panic buying despite warnings to the contrary from energy experts. Prices at the pump are rising.
Crude oil prices were up from opening at the time of writing, supported by the latest Oil Market Report of the International Energy Agency, which said the global oil inventory overhang has finally cleared. At the same time, however, the IEA updated its oil demand growth forecast for this year, seeing the growth rate at 5.4 million bpd, down by 270,000 bpd from the forecast in the IEA’s previous monthly oil report.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.