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The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 4.261 million barrels for the week ending January 29, along with gasoline, distillate, and Cushing draws as well.
Analysts had predicted an inventory build of 446,000 barrels for the week.
In the previous week, the API reported a draw in oil inventories of 5.272-million barrels, after analysts had predicted a small build of 430,000 barrels.
Oil prices were trading up on Tuesday ahead of the data release as the market heads further in backwardation territory and as traders view OPEC's adherence to its promised production quotas with renewed optimism.
A half-hour before Tuesday's data release, WTI had risen by $1.20 on the day (+2.24%) to $54.75, up $2.25 since this time last week.
The Brent crude benchmark had risen on the day $1.17 at that time (+2.08%) to $57.52—up $1.70 on the week.
U.S. oil dipped 100,000 bpd a day, to 10.9 million bpd, according to the Energy Information Administration, ending a six-week streak of 11 million barrels daily. Despite some views that the market fundamentals are looking up for oil, few are expecting a quick rebound in U.S. oil production.
The API reported a draw in gasoline inventories of 240,000 barrels for the week ending January 29—compared to the previous week's 3.058-million-barrel build. Analysts had expected a 1.134-million-barrel build for the week.
Distillate stocks saw a decrease of 1.622 million barrels for the week, adding onto last week's 1.398-million-barrel increase, while Cushing inventories fell by 1.885 million barrels.
Post data release, at 4:33 p.m. EDT, the WTI benchmark was trading at $54.86, while Brent crude was trading at $57.62.
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.