Oil prices rose Wednesday morning, despite a somewhat surprising EIA inventory report, which reflected rising crude stocks and gasoline inventories virtually unchanged.
Crude oil prices have risen today after the Energy Information Administration reported construction of 1.3 million barrels of crude inventory between the week of February 19th. The build was much lower than the API had estimated a day earlier.
The report was released a day after the American Petroleum Institute estimated an oil accumulation of more than a million barrels. It also compared analysts ’expectations of a 5.372 million barrel draw for the reported week and a 7.3 million barrel inventory recorded by the previous week’s EIA.
Surprisingly, gasoline stocks remained virtually unchanged between the week and Feb. 19, after a modest 700,000-barrel construction the previous week, despite interruptions in refining operations by Texas Freeze.
Gasoline production last week declined as a result of Texas refinery shutdowns, to 7.7 million bpd. This compared to an average production rate of 9 million bpd during the previous week.
In distillates, the EIA reported a 5.0 million barrel inventory drop for Texas Freeze week. Stocks of average distillates remain above seasonal averages, but are steadily declining, currently standing at 3 per cent over the five-year average.
Distillate production averaged 3.6 million bpd last week, compared to 4.6 million bpd the previous week.
Last week’s events in Texas will likely keep oil prices high for some time, as production restarts slowly and some may not return, as companies leave inefficient and marginal wells, despite WTI prices for about $ 60 a barrel.
Growing bullish sentiment among banks and traders has also contributed to the rise in oil prices recently, especially after Goldman said it expected prices to reach $ 70 and surpass them in the summer. The recovery in demand is driving this sentiment and production falls in the United States only served to strengthen it further.
At the time of writing, Brent crude was trading at $ 66.61 a barrel, and West Texas Intermediate at $ 62.76 a barrel.
By Irina Slav for Oilprice.com
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