As WTI enjoys the first meaningful price rise since this spring, and a day after the API injected further optimism in markets by reporting a 761,000-barrel draw in U.S. crude oil inventories, the EIA added fuel to the celebratory mood.
The authority reported a 1.8-million-barrel decline in U.S. commercial crude oil inventories for the week to September 22, to a total 471 million barrels.
Gasoline inventories were up by 1.1 million barrels, exceeding analyst expectations of a 921,000-barrel draw and largely in tune with an API report of a 1.47-million-barrel decline.
Refineries ran at 88.6 percent of capacity last week, the EIA also said, processing 16.2 million bpd of crude per day, versus 15.2 million bpd in the week before. Refiners produced 9.9 million bpd of gasoline, a slight uptick from the 9.8 million bpd in the prior week.
The EIA’s report comes after earlier today in Asian and European trading market, players took profits from the oil rally, pressuring prices somewhat. According to a senior Trafigura executive, who spoke to the FT, the lower-for-longer oil price era is about to end, thanks to growing demand.
Ben Luckock is in fact so bullish that he forecast demand could exceed supply of crude oil by 2-4 million bpd by the end of 2019 because of the US$1-trillion in spending plans that never saw the light of day as a result of the 2014 price crash. Related: Was Goldman Sachs Wrong About Oil Demand?
This belief, however, may be nothing more than wishful thinking, since most oil market observers seem to share the opinion that this latest rally was not caused entirely by a boost in demand and lower supply as reported by OPEC and external sources.
In fact, one important factor for the price boost was the Kurdistan referendum, which prompted Turkey’s President Recep Tayyip Erdogan to threaten the autonomous Iraqi region with shutting down a 500,000-bpd pipeline that carries Kurdish crude to the port of Ceyhan and international markets. This shutdown, if it ever occurs, would cause a hefty supply outage to add to the 1.8 million bpd that OPEC, Russia and their partners agreed to take off global markets.
By Irina Slav for Oilprice.com
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