Crude oil prices rose today after the Energy Information Administration reported a stock draw of 600,000 barrels for the week of December 18.
This compared to a draw of an estimated 3.1 million barrels for the past week and an inventory build-up of 2.7 million barrels for the week to December 18, as estimated by the American Petroleum Institute and reported yesterday. Analysts had expected the EIA to report a stock draw of 3.25 million barrels last week.
Oil prices have risen over the past two weeks on positive vaccine news and hopes for a recovery in demand once vaccinations have started on a large scale. Earlier this week, however, oil returned its climb on the news of a new, more virulent variant of the coronavirus infecting thousands in the UK and causing new travel restrictions in Europe and other parts of the world. The news saw oil traders leave their positions en masse, causing prices to drop.
A decline in crude oil purchases by Asian refineries also contributed to the most recent turn in oil price fortunes.
Meanwhile, the EIA reported a 1.1 million barrels of gasoline stock decline, with production averaging 8.8 million barrels per day last week. This compared to an inventory build-up of 1 million for the previous week and an average production of 8.5 million bpd.
For distillate fuels, the authority estimated a stock fall of 2.3 million barrels, producing an average of 4.6 million barrels per day. This compares with a modest stock increase of 200,000 barrels in the previous week and production of 4.6 million barrels per day.
“Oil prices are wilting over fears that the new grade will derail the recovery in fuel demand,” PVM Oil Associates analyst Stephen Brennock told Bloomberg on Monday as prices started to fall over fears of viruses. “In any case, it reaffirms that the road to normalization of demand is anything but smooth.”
At the time of writing, Brent oil was trading at $ 50.81 a barrel, with West Texas Intermediate at $ 47.81.
By Irina Slav for Oilprice.com
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