A day after the American Petroleum Institute gave oil bulls a cause for celebration with an estimated 8.636-million-barrel inventory decline for the week to September 7, the Energy Information Administration added to the optimism by reporting a draw of 5.3 million barrels.
At 396.2 million barrels, the authority said, crude oil inventories were within seasonal limits.
Refineries processed 17.9 million barrels daily last week, the EIA also said, producing 10.4 million bpd of gasoline and 5.5 million bpd of distillate. This compares with 10.2 million bpd of gasoline a week earlier, and 5.4 million bpd of distillate.
Gasoline inventories added 1.3 million barrels in the week to September 7, and distillate inventories rose by 6.2 million barrels. A week earlier, gasoline inventories gained 1.8 million barrels and distillate inventories added 3.1 million barrels.
More fuel inventory builds are on the way as refineries begin maintenance season ahead of winter, and crude oil stockpiles will likely rise as well: winter is a season of weaker oil demand in the northern hemisphere.
Meanwhile, prices remain on the seesaw ahead of the Iran sanction due to kick in on November 4. Washington has signaled it was unwilling to grant sanction waivers even to allies such as India, while Iran has given the European Union until November 5 to come up with practical guarantees it will continue buying Iranian crude.
While traders worry about where prices are heading, Russia’s Energy Minister Alexander Novak earlier today offered some more optimism for those interested in prices staying where they are. He said he saw on danger of an oil supply shortage despite the sanctions, but added that OPEC and Russia had enough spare capacity to use if the danger of a shortage reared its head.
Novak is meeting with U.S. Energy Secretary Rick Perry tomorrow in Moscow. The agenda will likely include oil prices and potential cooperation between Moscow and Washington to keep these stable.
By Irina Slav for Oilprice.com
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