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Oil prices spiked on Monday…
After unexpectedly rising 7.8 million barrels last week , ending a four-week streak of drawdowns, crude oil inventories this week went back to draws, with the American Petroleum Institute (API) reporting inventories down by 3.069 million barrels.
Analysts anticipated a 0.167 million barrel draw.
Meanwhile, crude stored in the nation’s Strategic Petroleum Reserves sunk by 211 million barrels, now at its lowest level since January 1984.
In the week ending December 9, the Department of Energy released 4.7 million barrels from the Strategic Petroleum Reserves , leaving the SPR with just 382 million barrels. On Monday, the DoE’s Office of Petroleum Reserves announced it would start repurchasing crude oil for the SPR in a good deal for American taxpayers.
The DoE will repurchase crude at lower prices–currently in the $77-$80 range–than the average of $96 barrels for which it sold SPR reserves this year.
In the week prior, the API reported a large draw in crude oil inventories of 7.819 million barrels , while the Energy Information Administration (EIA) reported a crude inventory increase of 10.2 million barrels for the week to December 9. At 424.1 million barrels, U.S. crude oil inventories were at 6% below the seasonal average for the last five years, the EIA noted in its report last Wednesday.
This week, the API also reported moderate builds in product inventories, reporting a 4.51 million barrel increase in gasoline stockpiles and a smaller, 0.83 million barrel build in distillate inventories.
Crude inventories at the Cushing hub rose by 0.84 million barrels this week.
WTI prices rose on Tuesday as the market reacted to OPEC’s falling crude production in November, per the organization’s Monthly Oil Market Report.
At 4:35 p.m. EST, WTI was trading up slightly over a percentage point on the day to just over $76 per barrel. Brent crude was trading down slightly, having trouble breaking the $80 mark.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
Personally, I think that on the balance, US oil companies have been a gift to the USA, as they allowed us to go from coal and horses to natural gas and self-powered vehicles. That’s an unpopular opinion recently.