WTI crude futures didn't move higher today after the Energy Information Administration confirmed the substantial inventory draw estimated by the American Petroleum Institute on Tuesday.
After the startling revision in U.S. oil demand in May, the EIA estimated an inventory draw of 17 million barrels for the final week of July, which compared with a modest decline of 700,000 barrels for the previous week.
The API on Tuesday reported that oil inventories in the U.S. had declined by 15.4 million barrels, which was the largest draw in years and immediately pushed oil prices even higher.
According to the EIA, on the other hand, at 439.8 million barrels crude oil inventories are 1% below the five-year average for this time of the year.
In gasoline, the authority estimated an inventory build of 1.5 million barrels for the last week of July, with production averaging 9.8 million barrels daily.
These figures compared with a stock decline of 800,000 barrels for the previous week and a production rate of 9.5 million barrels daily.
In middle distillates, the EIA reported an inventory decline of 800,000 barrels for the week to July 28, with production averaging 4.9 million bpd.
This compared with an inventory draw of 200,000 barrels for the previous week and a production rate of 4.8 million barrels daily.
Meanwhile, West Texas Intermediate topped $82 per barrel earlier this week and Brent crude jumped above $85 per barrel as demand forecasts suggested a sizeable supply deficit for the second half of the year. Production remains constrained by OPEC+ cuts and outages.
As a result, the U.S. Department of Energy just pulled back an offer to buy 6 million barrels of crude for the strategic petroleum reserve. The offer was made in early July, when WTI was trading below $72.
At the time of writing, Brent crude was trading at $84.12 per barrel with WTI changing hands at $80.65 per barrel, both down from opening.
ADVERTISEMENT
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- The Dark Fleet: How Unknown Traders Keep Russian Oil Flowing
- Big Oil Continues To Be Pushed Toward Greener Endeavors
- BP Raises Dividend Despite 70% Earnings Plunge
