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Oil jumps on the big gross inventory draw

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Crude oil prices rose slightly today after the EIA released its latest weekly report on the state of oil, in which the authority said crude oil inventories were down 8.6 million barrels in the week to February 22, while remaining above the five-year seasonal average.

This compares with an inventory increase of 3.7 million barrels for the previous week.

At the same time, gasoline inventories fell by 1.9 million barrels during the reporting period, compared with 1.5 million barrels a week earlier. The distillate fuel stocks lost 300,000 barrels during the week up to February 22, while a week earlier they had reserved a draw of 1.5 million barrels.

Refinery throughput was 15.9 million bpd last week, down from 15.7 million bpd a week earlier, with 9.6 million bpd of gasoline production and production. distillate fuel oil of 4.8 million bpd. This compares with production rates of 9.5 million bpd for gasoline and 4.8 million bpd for the distillate.

Yesterday, prices climbed after the American Petroleum Institute estimated a stock draw in which the market apparently did not expect, making it an extra week of surprises on stocks. The API estimated that the use of crude oil stocks amounted to 4.2 million barrels.

At the same time, the OPEC cuts continue to have a positive effect on prices, despite President Donald Trump's call for OPEC to relax as prices get too high. After Trump's tweet to OPEC, oil prices have fallen sharply, causing many traders to wonder if there is any rational rule left in the oil market.

Regardless of US warehouse inventories, production continues to increase after reaching a record high of 12 million barrels a day two weeks ago. This fundamental factor will likely continue to put pressure on prices, regardless of the magnitude of the cuts made by OPEC. However, it will mainly exert pressure on light crude prices, while heavy crude, what OPEC cuts and what Venezuela does not sell, is increasing.

By Irina Slav for Oilprice.com

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