By Irina Slav for Oilprice.com | Crude oil prices moved higher today after the U.S. Energy Information Administration reported an estimated inventory decline of 6.9 million barrels for the week of August 30.
A day earlier, the American Petroleum Institute reported its own inventory estimate, which saw these drop by a sizable 7.4 million barrels in the final week of August. Analysts polled by Reuters had expected a draw of around 1 million barrels.
The EIA’s previous report pegged the decline in oil inventories at a modest 800,000 barrels, with mixed changes in fuel inventories.
For the final week of August, gasoline and middle distillate inventories saw more mixed changes.
Gasoline stocks added 800,000 barrels in the week to August 30, with production averaging 9.7 million barrels daily.
This compared with an inventory draw of 2.2 million barrels for the previous week, when production stood at an average 9.6 million barrels daily.
In middle distillates, the EIA estimated an inventory decline of 400,000 barrels for the final week of August, with production at an average 5.2 million barrels daily.
This is compared with a modest inventory build of 300,000 barrels for the previous week when production of middle distillates averaged 5 million barrels daily.
Earlier in the week, the API data pushed crude oil prices higher, and now the EIA’s numbers are likely to reinforce this. Reports that OPEC+ would delay its partial reversal of production cuts also helped oil prices move higher. The expectation of a reversal has weighed on oil prices for weeks, even with no indication from OPEC that it was going ahead with that.
In any case, the benchmarks have rebounded from their latest trough, although bearish sentiment persists. However, it is not as solid as it was.
“Pessimistic sentiments in oil markets seem to ease after robust API data and news of OPEC+ reconsidering output jump, surfaced and boosted hopes,” Phillip Nova analyst Priyanka Sachdeva told Reuters.
ING analysts were of a different opinion, however. “Clearly, lingering demand worries outweigh any potential delay in this supply increase,” Warren Patterson and Ewa Manthey wrote. “If these reports turn out to be correct, the next key question is how long the group will delay their supply increases.”
By Irina Slav for Oilprice.com
