Crude Inventories Declined By 4.6 Million Barrels

Key Insights

• Crude inventories missed analyst estimates.
• Strategic Petroleum Reserve increased from 351.6 million barrels to 351.9 million barrels. 
• Domestic oil production decreased from 13.2 million bpd to 13.1 million bpd.

On December 6, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories declined by 4.6 million barrels from the previous week, compared to analyst consensus of -1.35 million barrels.

Total motor gasoline inventories grew by 5.4 million barrels, while distillate fuel inventories increased by 1.3 million barrels. Crude oil imports averaged 7.5 million bpd, rising by as much as 1.7 million bpd from the previous week.

Strategic Petroleum Reserve increased from 351.6 million barrels to 351.9 million barrels as U.S. continued to buy oil for reserves.

Interestingly, domestic oil production declined from 13.2 million bpd to 13.1 million bpd as producers reacted to the strong pullback in the oil markets.

WTI oil settled below the $70.50 level after the release of the EIA report. Oil prices remain under pressure as traders stay worried about demand. Gasoline inventories’ growth may serve as an additional negative catalyst for WTI oil. At the same time, the pullback in domestic oil production may provide some support to oil markets.

Brent oil made an attempt to settle below the $75.50 level. The market sentiment remains bearish as traders do not believe that OPEC+ production cuts would provide sufficient support to the market.

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