Oil prices rise in EIA bullish inventory report

Crude oil prices rose today after the Energy Information Administration reported an inventory draw of 600,000 barrels for the week to December 18.

This was compared to an estimated 3.1 million barrels of extraction for the previous week and an inventory of 2.7 million barrels for the week to December 18, as estimated by the American Petroleum Institute and reported yesterday. Analysts expected the EIA to report an inventory draw of 3.25 million barrels for last week.

Oil prices have risen in the past two weeks due to positive news about vaccines and hopes for a return to demand once vaccinations have begun on a large scale. However, earlier this week, oil reversed its rise in the news of a new, more virulent variant of coronavirus infecting thousands in the UK and causing new travel restrictions in Europe and other parts of the world. In the news, oil traders have left their positions en masse, reducing prices.

A decline in crude oil purchases by refineries in Asia has also contributed to the recent reversal of oil price fortunes.

Meanwhile, the EIA reported a drop in gasoline inventory of 1.1 million barrels, with an average production of 8.8 million bpd last week. This was compared with an inventory of 1 million for the previous week and an average production of 8.5 million bpd.

With regard to distilled fuels, the authority estimated a decrease in stocks of 2.3 million barrels, with an average production of 4.6 million bpd. This was compared to a modest increase in stocks of 200,000 barrels for the previous week and a production of 4.6 million bpd.

“Oil prices are fading amid fears that the new strain will derail the recovery in fuel demand,” PVM Oil Associates analyst Stephen Brennock told Bloomberg on Monday as prices began to fall due to fears about viruses. “If there is anything, it reaffirms that the road to normalizing demand is anything but smooth.”

At the time of writing, Brent crude was trading at $ 50.81 a barrel and West Texas Intermediate at $ 47.81

By Irina Slav for Oilprice.com

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