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Oil Soars On Bullish EIA Inventory Report
A week after it served a much-needed boost to markets with a crude oil inventory draw, today the Energy Information Administration strengthened the mood by reporting an oil inventory draw of 5 million barrels for the week to May 15.
This compared with a draw of 700,000 bpd last week and analyst expectations for a 967,000-barrel draw. Yesterday, the American Petroleum Institute estimated that oil inventories had fallen by 4.8 million barrels in the reporting period.
In gasoline, the EIA reported an inventory build of 2.8 million barrels for last week, compared with a decline of 3.5 million barrels for the previous week. Gasoline production averaged 7.2 million bpd last week, versus 7.5 million bpd a week earlier.
The EIA also reported a 3.8-million-barrel increase in distillate fuel inventories for the week to May 15, after a 3.5-million-barrel rise the previous week. Distillate fuel production averaged 4.8 million bpd, compared with 4.9 million bpd a week earlier.
Refineries processed 12.9 million bpd last week, compared with 12.4 million bpd during the previous week. Production, which two weeks ago fell to 11.6 million bpd from 11.9 million bpd during the previous week, likely continued to fall last week as well as prices remain below many producers’ production costs.
A day earlier, the EIA said it expected oil production in the seven largest U.S. shale basins to fall by a record 197,000 bpd next month, to 7.8 million bpd. The biggest decline will come from the most prolific basin, the Permian, which has also been the basin with the fastest production growth so far.
WTI was trading at $33.58 a barrel at the time of writing, with Brent crude at $36.29 a barrel, both up since opening. WTI has been on a roll lately, supported by optimism about returning demand and early trial news about an experimental vaccine, which has reportedly produced promising results.
By Irina Slav for Oilprice.com