Oil prices diverged yesterday on the back of a mixed EIA weekly report. Brent crude dropped 0.92% to $57.9/bbl as market participants continue to lock in profits following a rally to more than two year highs, while WTI gained 0.5% rising to $52.14/bbl on the back of declining crude inventories.
Crude stockpiles were surprisingly seen down last week, confirming earlier estimates by an oil & gas body. The inventory was assessed 1.85 million bbl down, against expectations for a 3.42 million bbl build, according to a Reuters poll.
Gasoline stocks on the other hand increased last week, albeit also unexpectedly according to an earlier consensus of analysts. The motor fuel stocks rose 1.11 million bbl, while a drop of 921,000 bbl was expected. Distillates were seen flat week-on-week.
The sharp increase in refining activity, combined with soaring exports of crude oil lifted demand drastically and outpaced supplies, leading to volumes being taken off storage. Input in refineries rose by 1 million bpd to 16.17 million bpd, while exports of crude oil reached a weekly record of 1.5 million bpd.
Imports of crude stood at 7.43 million bpd, a mere 59,000 bpd increase compared to the week prior, while domestic production ticked up to 9.55 million bpd, a weekly gain of 37,000 bpd. US crude oil production peaked at 9.61 million bpd in June 2015, before bottoming at 8.43 million bpd in July 2016.
The Oil Research Team
Supply Chain & Commodities Research