Oil prices rose Wednesday morning, despite a somewhat surprising EIA inventory report, which reflected a rise in crude inventories and near-unchanged gasoline stocks
Crude oil prices rose today after the Energy Information Administration reported that crude oil inventory had accumulated 1.3 million barrels for the week to Feb. 19. The build was much lower than the API estimated the day before.
The report came a day after the American Petroleum Institute estimated oil reserves in excess of 1 million barrels. It has also been compared to analyst expectations of a draw of 5.372 million barrels for the reported week and an inventory of 7.3 million barrels reported by the EIA for the previous week.
Surprisingly, gasoline stocks were virtually unchanged for the week to Feb. 19, after modest build of 700,000 barrels in the previous week, despite disruptions to refining operations from the Texas Freeze.
Gasoline production fell to 7.7 million barrels per day last week following the shutdown of the Texas refinery. This compared to an average production rate of 9 million barrels per day in the previous week.
As for distillates, the EIA reported a 5.0 million barrels stock decline for the week of the Texas Freeze. Stocks of middle distillate remain above the seasonal average, but are steadily declining, currently 3 percent above the five-year average.
Distillate production averaged 3.6 million bpd last week, compared to 4.6 million bpd the week before.
Last week’s events in Texas are likely to keep oil prices higher for some time as production slowly reboots, and some of it may not return at all as companies leave uneconomic, marginal wells despite WTI prices above $ 60 a barrel .
Growing bullish sentiment among banks and traders has also contributed to higher oil prices recently, especially after Goldman said it expected prices to hit $ 70 and surpass it by the summer. Recovery in demand is driving this sentiment, and production outages in the United States have only amplified it.
At the time of writing, Brent oil was trading at $ 66.61 a barrel, with West Texas Intermediate at $ 62.76 a barrel.
By Irina Slav for Oilprice.com
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