A day after the American Petroleum Institute reported a minor crude draw that nevertheless strengthened prices, the Energy Information Administration confirmed a draw, at 1.7 million barrels for the week to May 21.
At 484.3 million barrels, the EIA said, crude oil inventories are below the five-year seasonal average.
Analysts had expected the EIA to report an inventory decline of 1.279 million barrels for the period after it reported a build of 1.3 million barrels for the previous week.
In gasoline, the authority estimated an inventory draw of 1.7 million barrels for the week to May 21. This compared with a draw of 2 million barrels for the previous week. Gasoline production averaged 9.7 million barrels daily last week, which compared with 9.8 million bpd in the prior week.
In middle distillates, the authority estimated an inventory decline of 3 million barrels for the week to May 21 versus a draw of 2.3 million barrels for the previous week. Middle distillate production averaged 4.7 million bpd last week, which compares with 4.6 million bpd in the previous week.
Oil prices remained range-bound this week as headwinds clashed with tailwinds. The Iran nuclear deal was looming large over the bulls’ horizon, but recent reports that it might not be finalized as quickly as previously anticipated served to curb the downside.
On the tailwind side, expectations for demand remain strong, with Goldman Sachs this week reiterating its price forecast for Brent at $80 per barrel by the fourth quarter of the year, even with additional supply from Iran once the U.S. sanctions are lifted.
At the time of writing, Brent crude was trading at $68.23 a barrel, and Wet Texas Intermediate was trading at $65.55 a barrel, both slightly up from opening.
The upward potential remains strong, too. As a Rystad Energy market update put it, prices “remain at high levels as the high season for oil demand is approaching, and as restrictions are lifted in much of Europe and the United States.”
Source: Oil Price