Posted by E***** H******** on Thu, 01/06/2017 - 01:17
The American Petroleum Institute (API) reported a draw of 8.67 million barrels in United States crude oil inventories, compared to analyst expectations that markets would see a draw of only 2.8 million barrels for the week ending May 26.
The news of a larger than expected draw will no doubt be welcomed by the industry, as oil prices in the last couple of weeks have seem particularly resistant to the efforts of OPEC to rebalance the oil market, and it appears equally as resistant to dwindling US oil inventories-the latter of which has been of significant concern throughout much of 2017.
While this week is a significant draw in itself, the last five reporting weeks has seen a reduction of 19.277 million barrels, according to API data. Using the last five weeks of EIA data-for weeks ending April 21 through May 19, crude oil inventories have diminished by 15.9 million barrels. While the draw doesn't offset the builds seen in Q1, the disparity in trends from Q1 to Q2 cannot be ignored, and under normal circumstances, should be a positive sign for the industry. Instead, inventory reports and rig count data are having only a temporary knee-jerk effect on prices." #OIL