The latest government data reveals a notable decrease in commercial crude stockpiles in the United States, which fell more than analysts had projected. Oil prices experienced an upward trend, even as the Organization of the Petroleum Exporting Countries (OPEC) adjusted its demand forecasts for 2024 and 2025.
For the week ending Friday, inventories of crude oil, excluding the strategic petroleum reserve, saw a decline of 1.4 million barrels, bringing the total down to 422 million barrels, as reported by the Energy Information Administration (EIA). The expected drop, based on a Bloomberg poll, was set at only 1.1 million barrels.
This inventory level currently remains 6% lower than the five-year average for this period. In addition, propane and propylene stocks decreased by 3 million barrels last week. Conversely, total motor gasoline stocks increased by 5.1 million barrels, while distillate fuel inventories rose by 3.2 million barrels.
The overall commercial petroleum inventories recorded a decline of 900,000 barrels, according to the EIA's latest data. On the production front, gasoline output surged to 10 million barrels per day, up from 9.5 million barrels the previous week. Distillate fuel production, however, saw a slight decrease, edging down to 5.2 million barrels per day from 5.3 million barrels.
Refinery inputs averaged 16.7 million barrels per day last week, reflecting a reduction of 251,000 barrels compared to the previous week’s average. Refineries operated at 92.4% of their capacity, which was down from 93.3% the week prior. In market trading, West Texas Intermediate crude oil increased by 1.9%, reaching $69.92, while Brent crude oil rose 1.5% to $73.30.
Meanwhile, OPEC's monthly oil market report highlighted lowered demand growth forecasts for the upcoming years of 2024 and 2025. Moreover, certain OPEC+ members have agreed to extend voluntary oil production cuts to reinforce market stability. Analysts at ING indicated that they still foresee a surplus in the oil market by 2025, predicting downward price trends for the coming year.
In international news, the United States is reportedly contemplating new sanctions targeting Russia's oil trade..