Oil Prices Rebound On EIA Inventory Report

A crude oil inventory draw of 1.6 million barrels sent oil prices higher today, with the Energy Information Administration also reporting a fall in gasoline inventories and a modest build in distillate fuel inventories.

This compared with a draw of 4.5 million barrels for the previous week, the third weekly draw—and hefty—in a row.

A day earlier, the American Petroleum Institute cooled oil bulls’ optimism by estimating a gasoline inventory build of close to 5 million barrels for the week to August 14.

The EIA, for its part, estimated gasoline stockpiles had shed 3.3 million barrels last week, versus a modest decline of 700,000 barrels. Gasoline production last week fell, to 9.4 million bpd from 9.6 million bpd a week earlier.

Distillate fuel inventories rose by 200,000 barrels in the week to August 14, after a 2.3-million-barrel draw estimated for the previous week. Distillate fuel production averaged 4.7 million bpd, versus 4.8 million bpd for the previous week.

Refinery runs fell to 14.5 million bpd last week from 14.7 million bpd the week before.

Brent crude traded at $44.89 a barrel at the time of writing, with West Texas Intermediate at $42.44 a barrel in what is shaping up to be a mixed-results week. Oil started the week with a rise on the back of reports China was planning to ramp up oil imports from the United States but the budding rally ended soon amid doubts that the U.S. economy was recovering as quickly and consistently as it should be.

On top of that, OPEC+ is meeting today to discuss the progress of its production cut deal and future plans, adding a new angle of uncertainty. Even though no surprise news is expected to come out of this meeting it could tell traders how the deal is going and whether internal agreement remains robust.

OPEC+ boasted record compliance in July, at a combined 94-97 percent, according to different surveys.

By Irina Slav for Oilprice.com (View full article here)