API Reports Seventh Straight Inventory Draw

The American Petroleum Institute (API) on Wednesday reported a draw in crude oil inventories of 7.983-million barrels for the week ending July 2.

Analysts had expected a fall of 6.2 million barrels, based on a survey by S&P Global Platts.

In the previous week, the API reported a draw in oil inventories of 8.153 million barrels after analysts had predicted a draw of 4.686 million barrels.

Oil prices are up 40% so far this year, and soared earlier this week on the OPEC+ deadlock between Saudi Arabia and the United Arab Emirates (UAE), but volatility set in shortly afterwards. Oil prices were down over 2% early Wednesday, but were regained by the time of the API release.

Oil further fell Wednesday after a Wall Street Journal report highlighted, in no uncertain terms, the UAE’s clear desire to boost production and market share.

At 4:35 p.m. EST, WTI was trading down 1.87% on the day at $72.00 prior to the data release. Brent crude was trading down 1.72% for the day at $73.25.

While crude oil inventories continue to drop, U.S. oil production, with shale producers continuing to show restraint and now hedging on fears of another price war, has slumped to an average of 11.1 million bpd for the week ending June 25 (the same as the previous week) according to the latest data from the Energy Information Administration.

The API reported a build in gasoline inventories of 2.736-million barrels for the week ending July 2—on top of the previous week's 2.418-million-barrel build. This week, analysts had expected a draw of 0.886 million barrels.

Distillate stocks saw an increase in inventories this week of 1.086 million barrels for the week, compared to last week's 428,000-barrel increase.

Cushing inventories fell this week by 0.152 million barrels.

By Julianne Geiger for Oilprice.com