The Energy Information Administration confirmed a draw in crude oil inventories, boosting the rally of WTI that almost brought the U.S. benchmark to US$55 a barrel. According to the authority, inventories fell by 2.4 million barrels in the week to October 27, to 454.9 million barrels.
A day earlier, the American Petroleum Institute had estimated crude oil inventories had fallen by more than 5 million barrels, while analysts polled by S&P Platts expected a draw of 1.4 million barrels, with gasoline stockpiles expected at 1.7 million barrels lower than in the previous week.
EIA said gasoline stockpiles were indeed down, by 4 million barrels. A draw in gasoline inventories is kind of surprising for this time of year, but perhaps the seasonal decline in demand is a gradual one, not yet affecting the stockpiles data.
Refineries processed 16 million bpd daily last week, down 10,000 bpd on the previous week, producing 10.2 million bpd of gasoline.
EIA’s figures are unlikely to have a huge impact on oil prices, which are currently riding high on the wave of optimism that resulted from comments made recently by Russia’s President and Saudi Arabia’s Crown Prince about the partners’ dedication to bringing the oil market back to balance.
Two weeks ago, Vladimir Putin was the first to speak in support of another extension of the oil production cut deal Russia sealed with OEPC and a number of other producers last December. Then, last week, Crown Prince Mohammed said in several interviews that OPEC’s de facto leader was all for an extension of the deal until the end of 2018.
After these statements, an extension is all but certain, and it comes as global inventories are falling, sparking premature worries about a potential undersupply problem. Prices have reacted strongly, with Brent hitting US$60 for the first time since 2015 and WTI climbing closer to US$55 a barrel.