Crude oil prices remained relatively stable after the Energy Information Administration reported a draw of 5.9 million barrels in U.S. crude oil inventories for the week to June 15.
At the time of writing, Brent crude traded at US$75.60 a barrel, with West Texas Intermediate changing hands at US$65.77 a barrel, both up moderately from yesterday’s close.
A day earlier, the American Petroleum Institute estimated crude oil inventories to have fallen by 3.016 million barrels, with gasoline inventories surprisingly going up by 2.113 million barrels.
Analysts had expected the EIA to report a 690,000-bpd increase in crude oil inventories, after last week it reported a draw of as much as 4.1 million barrels in oil inventories and another substantial decline—of 2.3 million barrels—in gasoline stockpiles.
Last week, gasoline inventories went up by 3.3 million barrels, with average daily production standing at 10.1 million barrels. This compares with 10.5 million barrels a week earlier.
Distillate inventories were also up, by 2.7 million barrels, with average daily production at 5.5 million barrels, up from 5.1 million barrels in the prior week.
EIA’s report comes amid anticipation that OPEC’s meeting that begins tomorrow will fail to yield a decision to start raising oil production to offset a major decline in Venezuela and an expected decline in Iran after U.S. sanctions go into effect.
Some analysts are comparing this week’s meeting to one from 2011 when OPEC tried to reach a consensus to raise production to offset falling supply from war-torn Libya. That meeting failed to produce a consensus agreement—needed for all OPEC decisions—and some say this one will have the same fate.
It’s anyone’s guess what individual OPEC members will decide to do if the meeting ends without an agreement, but in all likelihood those that can produce more will do so, if only to keep their market share in the face of rising U.S. and other non-OPEC supply.
By Irina Slav for Oilprice.com
