A day after API contributed to WTI's reaching its highest price level since 2015 with an estimated 5-million-barrel draw in crude oil inventories, the EIA reinforced the bullish mood with its own draw, and a big one, of 7.4 million barrels for the last week of 2017
Analysts had expected the EIA to report a draw of 1.3 million barrels.
The authority said, however, that gasoline inventories had gone up, by 4.8 million barrels last week, with average daily production at 9.7 million barrels. This compares to a 600,000-bpd increase in gasoline inventories in the prior week and an average daily production rate of 10.2 million barrels.
The EIA report comes amid continuing protests in Iran, which sent Brent crude closer to US$70 a barrel and West Texas Intermediate above US$62 a barrel. There is fear that the civil unrest in Iran could extend into Saudi Arabia, where the government cut fuel subsidies as of the start of the year and announced plans to introduce a number of taxes.
This would provide further upward momentum for prices, as would more militant attacks in Libya: Yesterday, a senior official from the U.S. Africa Command told Asharq Al-Awsat Islamic State forces in Libya may be planning an attack on the country's so-called Oil Crescent. Related: Will Oil And Gold Prices Rise This Year?
Yet this momentum has its limits. Already there are analysts warning that prices have nowhere to go but down after net speculative long bets on crude oil, gasoline, and heating oil broke records in the week to December 26, at a staggering 1.183 billion barrels.
At this extent of exposure, buyers will have to sooner or later start selling, and this would inevitably push prices down. However, the downward pressure may not be too strong, ClipperData's director of commodity research Matt Smith told the CNBC, as there are currently enough tailwinds for oil prices.
At the time of writing, WTI traded at US$61.79 a barrel, while Brent crude was at US$67.87 a barrel.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More