Oil Rises on Inventory Draw
Crude oil prices moved higher today after the Energy Information Administration reported an estimated inventory decline of 6.9 million barrels for the week to December 22.
This compared with a sizeable build in crude oil stocks for the previous week, at 2.9 million barrels.
A day earlier, the American Petroleum Institute estimated crude oil inventories had added 1.84 million barrels in the week to December 22.
In fuels, the authority reported inventory mixed inventory changes for the week to December 22.
Gasoline stocks shed 600,000 barrels in the reporting period, with production averaging 10 million barrels, a slight increase on the week.
This compared with an inventory build of 2.7 million barrels for the previous week, when gasoline production averaged roughly 10 million barrels daily.
In middle distillates, the EIA estimated an inventory build of 800,000 barrels for the week to December 22, with production averaging 5.1 million barrels daily.
This compared with an inventory increase of 1.5 million barrels for the previous week, when distillate fuel production stood at an average 4.9 million barrels daily.
Oil prices, meanwhile, remain relatively stable amid signs the situation in the Red Sea is beginning to normalize, despite reports of a tanker attack off the coast of India with a drone that the U.S. said was fired from Iran.
“The market is likely to try the upside again… maybe in the early new year, also on expectations of a recovery in fuel demand thanks to monetary easing in the United States and higher kerosene demand during the winter in the northern hemisphere,” NS Trading analyst Hiroyuki Kikukawa told Reuters.
On the other hand, the attacks on ships in the Red Sea have not stopped and are “likely to keep markets on edge,” Saxo Capital Markets analyst Redmond Wong told Bloomberg. He added that reports of inventory builds in the U.S. should balance that effect on benchmarks.
