Crude oil prices have risen further today after the Energy Information Administration reported an oil inventory of 6.1 million barrels for the week to December 25.
The day before, the American Petroleum Institute also helped drive prices up by estimating a drop in crude oil supplies of 4.785 million barrels for the same week.
Last week, the EIA had estimated a modest supply drop, amounting to 600,000 barrels, which nonetheless helped keep prices higher as it coincided with positive vaccine updates that traders linked traders with an expected improvement in demand next year.
Even the news that vaccination in the United States is progressing much slower than expected, with just over a million people vaccinated on December 23, compared to a planned 20 million for December, did not affect the oil rally. This was likely because Congress finally agreed last week on a pandemic stimulus bill that many expect will boost both consumer spending and oil demand.
The EIA report is now likely to amplify this rally. The authority also reported a petrol supply draw of 1.2 million barrels for the last full week of December, compared to a drop of 1.1 million barrels a week earlier. Gasoline production averaged 9.2 million bpd last week, compared to 8.8 million bpd a week earlier.
For distillate fuels, the EIA reported an inventory increase of 3.1 million barrels for the week to December 25, with an average production of 4.6 million barrels per day. This compares with a stock decrease of 2.3 million barrels in the previous week and an average production of 4.6 million barrels per day.
Refineries processed 14.3 million barrels per day of crude oil last week, compared to 14 million barrels per day a week earlier, representing 79.4 percent of their capacity, compared to 78 percent in the previous week.
The report suggests that despite recent extensive inventories, there is still some way to go before demand for oil and fuels improves more strongly. There was also disturbing news from the OPEC + camp this week: Deputy Prime Minister Alexander Novak said Russia will call for a further increase in production at the January meeting of the expanded cartel, given that prices were currently within optimal range.
By Irina Slav for Oilprice.com
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