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Crude oil prices ticked higher today after the U.S. Energy Information Administration reported an estimated decline of 6.4 million barrels in inventories for the week to April 19.
This compared with an inventory build of 2.7 million barrels for the previous week, which pressured prices last week.
It also compared with an inventory draw of 3.23 million barrels as estimated by the American Petroleum Institute on Tuesday, with the group also reporting a gasoline inventory decline of about half a million barrels. Analysts had expected an inventory build in crude oil.
In fuels, the EIA estimated mixed inventory changes in the reporting period.
Gasoline inventories shed 600,000 barrels in the week to April 19, with production averaging 9.1 million barrels daily.
This compared with an inventory decline of 1.2 million barrels for the previous week, when production averaged 9.4 million barrels daily.
In middle distillates, the EIA estimated an inventory build of 1.6 million barrels for the week to April 19, with production averaging 4.8 million barrels daily.
This compared with an inventory draw of 2.8 million barrels for the previous week, when production averaged 4.6 million barrels daily.
Oil prices rose earlier on Wednesday, driven by the surprise draw in inventories estimated by the API on Tuesday, recouping some of the losses made earlier in the week as tensions in the Middle East appeared to have quietened.
“Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now,” ING said in a note quoted by Reuters, adding “The US and Europe are preparing for new sanctions against Iran – although these may not have a material impact on oil supply in the immediate term.”
Separately, the Dutch bank’s head of commodity strategy Waren Patterson wrote that the upward potential for oil prices appeared limited thanks to spare capacity.
“The market is obviously of the view that spare OPEC production capacity will come into play in the event of any supply shocks, or that ongoing tension is unlikely to lead to significant supply losses,” he said Monday.
