Oil Rises as EIA Reports Huge Crude Consumption

Oil Rises as EIA Reports Huge Crude Consumption

Crude oil prices jumped today after the US Energy Information Administration estimated that inventories in the country fell 12.5 million barrels in the week to May 19.

A day earlier, the American Petroleum Institute estimated that crude oil inventories in the United States had risen/fallen by 6.7 million barrels, which surprised traders and caused an increase in oil purchases which drives up prices.


A week earlier, the EIA had estimated a buildup of crude oil inventories of 5 million barrels, which, however, failed to depress prices over fears of a US debt default. .

At 455.2 million barrels, according to the EIA, crude oil inventories in the United States are 3% below the five-year seasonal average.

In fuels, the EIA estimated inventory drawdowns for the week to May 19.

Gasoline inventories fell 2.1 million barrels from a draw of 1.4 million barrels the previous week.

Gasoline production averaged 10.3 million barrels per day last week, down from 9.5 million barrels per day a week earlier.

Middle distillate inventories last week fell 600,000 barrels. This compares to a modest increase in inventories of around 100,000 barrels the previous week.

Middle distillate production averaged 4.9 million barrels per day last week, compared to 4.9 million barrels per day the previous week.

API’s report of a stock drop yesterday sent prices higher, especially as it coincided with a statement by Saudi Arabia’s energy minister that short sellers in the oil sector should “do attention”.

“Speculators like in any market they’re here to stay I keep telling them they gon’ be ouch they did it in April I don’t have to show my cards , I’m not a poker player… but I would just tell them to be careful,” Abdulaziz bin Salman was quoted as saying by Reuters.

As of this writing, Brent crude was trading at $78.03 a barrel with West Texas Intermediate at $74.12 a barrel, both up since the open.

By Irina Slav for Oilprice.com

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