Oil Recoups Losses As API Reports Large Crude Inventory Draw

The American Petroleum Institute (API) estimated that there was a draw this week for crude oil of 3.0 million barrels, compared to analyst predictions of a 1.558 million barrel draw.

U.S. crude inventories have shed some 80 million barrels since the start of 2021 and about 23 million barrels since the start of 2020.

In the week prior, the API reported a draw in crude oil inventories of 4.28 million barrels after analysts had predicted a build of 25,000 barrels.

Oil prices were trading down on Tuesday as it appeared that Ukraine and Russia had made some progress in their peace talks.

WTI was trading down 1.31% at $104.60  per barrel on the day at 2:10 p.m. ET—down nearly $7 per barrel on the week. Brent crude was trading down 1.65% on the day at $110.60 per barrel on the day—down $5 per barrel on the week.

At a time when American consumers are concerned about the prices at the pump and the global crude oil markets remain tight, U.S. crude oil production has not budged in seven weeks from its position at 11.6 million bpd—still down 1.5 million barrels per day from pre-pandemic times as of March 18.

This week, the API reported a draw in gasoline inventories at 1.357 million barrels for the week ending March 25—after the previous week's 626,000-barrel draw.

Distillate stocks saw a decrease in inventory of 215,000 barrels for the week, on top of last week's 826,000 barrel decrease. Cushing saw a 1.061 million barrel decline this week. Cushing inventories rose to 25.2 million barrels as of March 18, according to EIA data—down from 59.2 million barrels at the start of 2021, and down from 37.3 million barrels at the end of 2021.

At 4:36 pm, ET, WTI was trading at $105.00 (-0.91%), with Brent trading at $111.30 (-1.08%).

By Julianne Geiger for Oilprice.com

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