Surprise Crude Oil Draw Sends Oil Prices Up

The American Petroleum Institute (API) reported a surprise draw in crude oil inventories of 2.6 million barrels for the week ending March 8, coming in significantly under analyst predictions that crude oil inventories would build by 2.655 million barrels.

Last week, the API reported a large surprise build in crude oil of 7.29 million barrels. A day later, the EIA supported API’s account of a large gain, estimating that crude inventories had climbed by 7.1 million barrels.

Including this week’s data, the net draw is just 640,000 barrels for the ten reporting periods so far this year, using API data.

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Oil prices were up slightly on Tuesday prior to the data release on word that Saudi Arabia would continue to restrict exports to the United States and as Venezuela’s status grew even more grim with a weekend blackout that halted already restricted exports from its main terminal. Neither factor held enough sway to move prices too high, as US oil production continues unabated.

The WTI benchmark at 2:32 pm EST was trading up on the day by $0.09 (+0.14%) at $56.87, roughly flat week on week. The Brent benchmark was trading up $0.07 (+0.11%) at $66.65, also flat week on week.

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The API this week reported a large draw of 5.8 million barrels in gasoline inventories for the week ending March 1. Analysts estimated a draw in gasoline inventories of 2.532 million barrels for the week.

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending March 1—the latest information available—held fast at an average of 12.1 million barrels per day–the latest in a long string of highs for the United States.

Distillate inventories increased by 195,000 barrels, compared to an expected draw of 1.858 million barrels for the week.

Crude oil inventories at the Cushing, Oklahoma facility fell by 1.1 million barrels for the week.

The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EST.

By 4:41pm EST, WTI was trading up at $56.93 and Brent was trading up at $66.71.

By Julianne Geiger for Oilprice.com

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