The price of crude oil has risen today in the upward news of the United States Energy Information Administration, which has reported a draw of 6.4 million barrels of crude oil inventories and another of fuel inventories .
A week earlier, the EIA had estimated a modest decline of 1.3 million barrels in crude inventories, but a considerable increase in gasoline pushed up prices, indicating that strong demand did not falter. Amid the latest rise in Covid-19 infections.
For the week to September 10, the EIA reported another gasoline inventory draw, with 1.9 million. This was compared to the 7.2 million barrel draw a week earlier.
Gasoline production last week averaged 9.3 million bpd, compared to 10.1 million bpd the previous week.
Average distillate inventories threw 1.7 million barrels between the week and Sept. 10, compared to a draw of 3.1 million barrels the previous week.
Average distillate production averaged 4.2 million bpd last week, compared to 4.2 million bpd the previous week.
A day before the EIA reported inventory movements, the American Petroleum Institute had estimated that crude stockpiles had dropped to about 4 million barrels, prompting prices to rise. Since the beginning of the year, according to API figures, US crude stockpiles have declined by 70 million barrels.
Meanwhile, production will increase as the inventory of holes drilled but not finished in the U.S. slate patch decreases. This, however, should not be a problem for prices, as demand is also strengthened.
In its latest monthly oil report, the International Energy Agency predicted a 1.6 million bpd rise in global oil demand next month as the Delta variant of the coronavirus releases control of economies. Then it would continue to grow the rest of the year, the agency said, before starting to slow next year.
“The market should approach equilibrium from October if OPEC + continues to develop production cuts. However, only at the beginning of 2022 supply will be high enough to allow oil stocks, ”the IEA said in its report.
This would provide stable price support over the coming months and support will be needed as U.S. slate drills increase along with OPEC + to offset the depletion of inherited wells.
By Irina Slav for Oilprice.com
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