Last week, oil inventories decreased by 1.3 million barrels

The API stated Wednesday that U.S. oil stockpiles decreased for a second consecutive week, just as many people were beginning to worry about the demand picture due to an increase in COVID-19 cases in China. Following the release of the data, West Texas Intermediate, the U.S. benchmark, traded at $78.78 per barrel after closing down 57 cents at $78.96.

The week ending December 23 saw a 1.3 million barrel decrease in U.S. crude stockpiles. Comparatively, the API reported a draw of 3.069M barrels for the previous week. The inventory reduction comes as rising COVID infections in China, the world’s top petroleum importer, are anticipated to have an adverse impact on business travel, economic activity, and eventually demand.

However, the API data also indicated that distillate stocks increased by 388,000 barrels and gasoline inventories increased by 510,000 barrels last week. According to the official government inventory report that is scheduled on Thursday, the weekly supply of U.S. crude declined by roughly 1.52M barrels last week.

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