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Oil Prices May Have Reached A Bottom

Oil Prices May Have Reached A Bottom

It appears unlikely that a…

U.S. Crude Inventories Down 2.2 Million Barrels – EIA

Cushing Oil Storage

The Energy Information Agency repored that U.S. commercial crude oil inventories declined by 2.2 million barrels in the week to July 1, standing at 524.4 million barrels. The American Petroleum Institute yesterday reported that according to its calculations commercial inventories had dropped by 6.7 million barrels.

While the API figures sent WTI higher, the official data compiled by the EIA immediately weighed on the U.S. benchmark. WTI was trading at US$46.82 a barrel within an hour of the release of EIA’s report.

The EIA remarked that the current level of commercial stockpiles is record-high for this time of year, when driving season is in full swing. Related to this, gasoline inventories were down by a meager 100,000 barrels, with the total remaining also above average for the time of year, and considerably. Gasoline production, on the other hand, went up by 10 million barrels daily.

Refineries in the U.S., operating at 92.5 percent of capacity, processed 16.7 million bpd last week, which was 8,000 barrels lower than the week before, on average.

In production, preliminary figures revealed a 194,000-barrel draw in the week to July 1.

The continuing record-high levels of crude and fuel stockpiles are worrying analysts, especially coupled with data about the addition of more active rigs across the shale play. As many as 11 oil rigs were added to the total in the week to July 1, Baker Hughes reported, indicating a returning confidence among shale oil producers, encouraged by the rally in oil prices. The sustainability of this rally is questionable, however, as international prices took a sharp plunge after Brexit on renewed worry about the state of the global economy.

By Irina Slav for Oilprice.com

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  • Jay on July 07 2016 said:
    Why is there such a huge difference between the EIA and API for recording. And how in anyway can traders turn bearish after a draw of 2.2 million barrels a day. Might not be as high as they were expecting but I'm sure there were not expecting weekly oil production to drop by 195,000 barrels a day either now at 8.4 million barrels a day. These traders and experts I swear are some of the dumbest people I have seen speak on tv or at conferences or have read about. Watch all these idiots tomorro proclaim tomorrow that because a rise in 5-10 rigs that us weekly oil production will now begin increasing instead of falling off a cliff . So stupid, not a clue

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