Crude oil prices moved higher today after the U.S. Energy Information Administration reported a decline in inventories for the week to August 16.
Those shed 4.6 million barrels over the period, compared with a build of 1.4 million barrels that surprised traders last week.
On Tuesday, the American Petroleum Institute reported another unexpected inventory increase, but a moderate one, at 347,000 barrels.
In fuels, the EIA also estimated draws in inventories.
Gasoline inventories fell by 1.6 million barrels over the week to August 16, which compared with a draw of 2.9 million barrels for the previous week.
Gasoline production averaged 9.8 million barrels daily last week, which compared with 9.7 million barrels daily for the previous week.
In middle distillates, the authority reported an inventory draw of 3.3 million barrels for the week to August 16, which compared with a draw of 1.7 million barrels for the previous week.
Middle distillate production last week averaged 4.9 million barrels daily, which compared with 4.8 million barrels daily for the previous week.
Oil prices meanwhile remain depressed, with API's inventory report becoming the latest contributing factor despite the modest size of the estimated build. In addition to that, hopes of a ceasefire in the Middle East also weighed on oil prices as they reduced the risk of a supply disruption, and the perception of weak Chinese demand remained stable.
"While weaker Chinese demand has been well reported, refinery margins around the globe have been under pressure for much of August, suggesting that these demand concerns are not isolated to just China," ING analysts said, as quoted by Reuters, suggesting there could be more pain for oil bulls ahead.
On the other hand, "We think any fall in oil prices tied to a Gaza truce will likely be short
lived," Commonwealth Bank of Australia analyst Vivek Dhar told Bloomberg, adding that this was because the actual chances of a ceasefire being signed by Israel and Hamas were slim.
By Irina Slav for Oilpice.com
More Top Reads From Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
Comments
Still, the solidity of market fundamentals and the robustness of global oil demand will always prevail at the end over manipulations.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert
Oil Ticks Higher as EIA Reports Inventory Draws Across the Board