American Petroleum Institute (API) reported a draw in crude oil inventories of 6.829 million barrels for the week ending July 24. Analysts had predicted a modest inventory build of 357,000 barrels. In the previous week, the API reported a significant—and unexpected–build in crude oil inventories of 7.544 million barrels, after analysts had predicted a draw. This week’s estimate would seem to undo last week’s shocking inventory build.
Delays in the next stimulus bill are expected to have a negative effect on oil markets, even with strong OPEC action and 2 million bpd less in US oil production. Oil production in the United States has now fallen from 13.1 million bpd on March 13 to 11.1 million bpd for July 17, according to the Energy Information Administration, after sitting for the previous four weeks at 11 million bpd. Distillate inventories were up by 187,000 barrels for the week, compared to last week’s 1.357-million-barrel draw, while Cushing inventories saw an increase of 1.144 million barrels.