Drawing Too Much Oil Can Be Rough for The Future

A stunning crude oil stock draw of over 10 million barrels continuing a string of weekly declines reported by American Petroleum Institute, the Energy Information Administration released its weekly estimate, which confirmed the dimensions of the draw, strengthening oil costs further.

According to the EIA, U.S. crude oil inventories shed 10.8 million barrels within the week to July 19. This follows an estimated stock draw of 3.1 million barrels for the previous week. Analysts had expected the EIA to report a list draw of 6.33 million barrels.

Gasoline inventories fell by 200,000 barrels last week, versus a jump of 3.6 million barrels within the previous week. Gasoline manufacturing, the EIA stated, averaged 10.1 million bpd last week, up from 9.9 million bpd a week earlier.

In distillate fuel, the authority reported a listing increase of 600,000 barrels. Every week earlier, distillate fuel inventories added a substantial 5.7 million barrels. Manufacturing last week averaged 5.2 million barrels daily, versus 5.4 million bpd a week earlier.

Refineries processed 17 million bpd within the seven days to July 19, down from 17.3 million bpd processed on average within the previous week.

The API’s report yesterday helped push costs larger because the draw it had estimated beat analyst expectations after the huge 10-million-barrel draw the API had reported last week. EIA’s figures from at this time will, without a doubt, strengthen the rally as the latest developments in U.S.-Iranian relations represent the combined indicators that the oil market likes to hate.

While these relations remain tense and are usually getting tenser after the U.S. Navy shot down an Iranian drone over the Strait of Hormuz—reports of pending negotiations have relieved some of that stress, sending oil costs lower.

On the time of writing, Brent crude traded at US$63.96 a barrel with West Texas Intermediate at US$56.97 a barrel, each reasonably up since trade opened.