After industry data revealed a significantly steeper-than-expected draw in crude oil stocks last week in the U.S., the largest fuel consumer in the world, oil prices climbed more than 1% on Wednesday, trading close to their highest level since April. While U.S. West Texas Intermediate crude increased by 84 cents, or 1.03%, to $82.21 per barrel, Brent crude futures for October increased by 92 cents or 1.1%.Tuesday’s closing prices for both benchmarks were lower, ending a three-day winning streak.
According to market sources citing American Petroleum Institute data for the week ending July 28, U.S. oil stockpiles dropped by 15.4 million barrels, as opposed to analysts’ expectations for a decline of 1.37 million barrels. Records show that if the government data released later on Wednesday match the industry drawdown figure, it will be the greatest decline in U.S. crude inventory. According to statistics going back to 1982, if the U.S. government figures, which are anticipated later on Wednesday, match the industry drawdown total, it would be the biggest decrease in oil inventory ever. returning to 1982.
As demand for oil outpaces supply, which has been restrained by significant production cuts from Saudi Arabia, the de facto leader of the Organisation of the Petroleum Exporting Countries (OPEC), which has supported prices, oil stockpiles have also started to decline in certain other locations. An outage that limited Nigerian supplies and Saudi Arabia’s voluntary cut both contributed to a decrease in OPEC oil production in July, according to a Reuters survey released on Monday.
According to API data, petrol stockpiles decreased due to demand by around 1.7 million barrels as opposed to predictions of a 1.3 million barrel decline. Compared to analysts’ predictions of a gain of 112,000 barrels, distillate stockpiles decreased by around 510,000 barrels. The Biden administration has withdrawn its offer to purchase 6 million barrels of oil for the U.S. Strategic Petroleum Reserve, an Energy Department official said on Tuesday, as it is anticipated that oil prices will climb further as a result of the output reduction.
