#OilPrices #WTI #APIInventory #DOEData #CrudeOil #GasolineDraws #OilProduction #StockDraws
The oil market experienced a notable upturn as West Texas Intermediate (WTI) crude prices extended their gains, notably influenced by supportive technical factors and a broader decline in inventory levels across the board. The climb in WTI prices comes on the heels of a report from the American Petroleum Institute (API), which highlighted significant reductions in crude, Cushing, gasoline, and distillate inventories. This trend of inventory reduction was further corroborated by the Department of Energy (DOE), presenting a consistent picture of dwindling supplies. Notably, the DOE report showed a substantial decrease in gasoline inventories, marking the biggest draw since March.
Crude oil stocks have been in a declining trend for four consecutive weeks, according to official data, with the DOE data echoing the API’s findings of across-the-board draws. The DOE data showed a drop in crude inventories of 3.74 million barrels, a reduction in Cushing stocks by 1.71 million barrels, an impressive decrease in gasoline supplies by 5.57 million barrels, and a cut in distillates by 2.75 million barrels. These significant draws suggest a tightening supply landscape in the U.S. market, bolstering oil prices.
Further influencing the oil market, the Biden administration contributed to the Strategic Petroleum Reserve (SPR) by adding another 690,000 barrels in the past week. Additionally, U.S. crude production has remained at record highs despite a continuing decline in the rig count, indicating a resilient output amidst fluctuating market dynamics.
Interestingly, oil prices traditionally face pressure from August through November, attributed to cyclical declines and renewed concerns over demand, particularly from China. The absence of further economic support from Beijing has been a drag on oil benchmarks in past years. However, the current landscape, characterized by notable inventory draws and technical support levels such as the 200-day moving average (200DMA) providing a cushion for WTI prices, suggests a robust underpinning for oil in the near term.
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