Oil prices rise on surprise crude draw

The American Petroleum Institute (API) estimated on Tuesday a surprise large crude oil inventory draw of 4.27 million barrels for the week ending January 24, compared to analyst expectations of a 482,000-barrel build in inventory.

Last week saw a build in crude oil inventories of 1.57 million barrels, according to API data. The EIA’s estimates, however, were of a draw of 400,000 barrels for that week.

Oil prices were up earlier in the day prior to the afternoon data release, ending a five day price slide as fears of oil demand destruction at the hands of the deadly Coronavirus gripped the oil markets. Even with Libya’s near-complete production shutdown of nearly 1 million barrels per day, oil prices were still down week over week.

At 3:43 pm EST on Tuesday the WTI benchmark was trading up $0.46 (+0.87%) at $53.60 - roughly down $5 per barrel under last week’s levels. The price of a Brent barrel was also trading up slightly on Tuesday, by $0.33 (+0.56%), at $58.91 - off more than $6 per barrel compared to last week’s prices.

The API this week also reported a build of 3.27 million barrels of gasoline for week ending January 24, after last week’s large 4.5-million-barrel build. This week’s large gasoline build compares to analyst expectations of a 1.32-million barrel-build for the week.

Distillate inventories were down by 141,000 barrels for the week, compared to last week’s large 3.5-million-barrel build, while Cushing inventories rose by 1.02 million barrels.

US crude oil production as estimated by the Energy Information Administration showed that production for the week ending January 17 held fast at 13.0 million bpd, a record high for the United States.

At 4:43 pm EDT, WTI was trading at $53.57, while Brent was trading at $58.88.

This article was originally published on Oilprice.com