Crude oil prices strengthened with WTI-Brent spreading slightly on Wednesday. Hurricane Laura, now a catastrophic Category 4 hurricane, is expected to be an “invincible storm surge”, extreme winds and flash floods over eastern Texas and Louisiana. This is likely to cause damage to Gulf Coast oil production facilities. Meanwhile, further declines in the US oil stock supported crude oil prices.
The report from the US Energy Information Administration (EIA) shows that total crude oil and crude oil products (ex. SPR) stored -7.78 mmb to 1436.04 mmb in the week ending 21 August. Crude oil inventory decreased -4.69 mmb (consensus: – 3.69 mmb) to 507.76 mmb. Inventory fell in 4 out of 5 PADDs. The PADD 3 (Gulf Coast) stock alone dropped -2.45 mmb during the week. Push containers slid -0.28 mmb to 52.4 mmb. The utilization rate added +1.1 percentage points to 82%, while crude production increased steadily with increasing + 0.1M bpd to 10M bpd per week. Crude oil imports rose +0.19 bpd to 5.92 mdbd per week. In the case of stocks of refined petroleum product, the fuel inventory fell -4.58 mmb to 239.18 mmb as demand increased + 6.15% to 9.16M bpd. The market had expected a decrease of -1.53 mmb in stocks. Production increased + 1.26% to 9.52M bpd, while imports fell -3.23% to 0.54M bpd during the week. Distillate added +1.39 mmb to 179.2 mmb. The market had expected a -0.73 decline. Demand jumped + 21.67% to 3.95M bpd. Production increased + 8.01% to 5.12 mmb, while imports increased + 168.75% to 0.13M bpd during the week.
Released after close to market on Wednesday, the industry-sponsored API estimated that crude oil inventories fell -4.52 mmb during the week. For refined petroleum products, the petrol inventory decreased -6.39 mmb, while for distillate it was added +2.26 mmb.
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