Surprise Crude Draw Lifts Hope For Oil Market

The American Petroleum Institute (API) reported a small draw of 907,000 barrels of United States crude oil inventories for the week ending February 16, according to the API data. Analysts had expected a small build of 1.333 million barrels in crude oil inventories, instead.

Last week, the American Petroleum Institute (API) reported a build of 3.947 million barrels of crude oil, along with a build in gasoline inventories of 4.634 million barrels.

This week’s data is more optimistic, with the API reporting not only a surprise draw for crude oil, but a modest gasoline build of 1.468 million barrels, which was largely in line with analyst forecasts that had the build pegged at a 1.229-million-barrel build.

The WTI and Brent benchmarks both down on Wednesday with WTI trading down $0.32 (-0.52 percent) at $61.47, while Brent trading down $0.24 (-0.37 percent) at $64.81 at 12:07pm EST. Both benchmarks are up from this same time last week, largely on OPEC jawboning that its production cuts may extend beyond 2018. Still, the threat of the U.S. shale boom is limiting prices.

U.S. crude oil production for week ending February 9 was up this week, coming in at 10.271million bpd, yet another new high.

Distillate inventories saw a fairly large draw of 3.563 million barrels. Analysts had forecast a smaller decline of 1.633-million-barrels.

Inventories at the Cushing, Oklahoma, site decreased by 2.644 million barrels this week.

The U.S. Energy Information Administration report on oil inventories is due to be released on Thursday at 11:00am. EST—a one day delay due to the President’s Day holiday in the United States.

By 4:42pm EST, the WTI benchmark was trading down 1.12 percent on the day to $61,10 while Brent was trading down 0.52 percent on the day at $64.71.

By Julianne Geiger for Oilprice.com

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