Oil prices rise on US inventory drawdown

U.S. oil futures advanced in volatile trading Wednesday, as the market ran into resistance despite data showing a bigger than expected drawdown in weekly crude inventories.

According to the Energy Information Administration’s (EIA) weekly print, commercial crude stockpiles trashed 2.508 million barrels in the period ending August 12, following the 1.055 million barrel build seen in the previous week.

According to AAA, the current national average pump price per gallon of regular gasoline is $2.131, up from $2.127 a week ago and down eight cents compared with the month-ago price.

Distillate inventories increased by 1.9 million barrels last week and are now near the upper limit of the average range for this time of year. The World Bank slashed its 2016 global growth forecast in January to 2.4% from 2.9% because of low commodity prices, sluggish demand, weak trade and diminishing capital flows.

Before the EIA report, WTI crude for September delivery traded down about 1.3% at around $45.95 a barrel and rose to around $46.35 shortly after the report’s release.

Whatever the reading, analysts expect prices to fluctuate ahead of a September meeting in Algeria involving members and non-members of the Organization of the Petroleum Exporting Countries (OPEC).

Crude oil imports fell to a six-month low of 7.35 million b/d as independent refiners’ buying cooled from the wave started in December past year.

Saudi Arabia produced 10.55m barrels of oil per day (bpd) in June, and increased output to a record 10.67m bpd in July.

The number of countries receiving exported US crude oil has risen since the removal of restrictions on exporting USA crude oil in December 2015. USA crude production also rose about 100,000 bpd week over week to 8.6 MMbpd. Still, the draw in both crude oil and gasoline inventories should have a positive effect on market sentiment.

However, most of the countries listed on the EIA’s “exports by destination” page indicated no crude oil imports from the USA for the first five months of 2016. Off-topic, inappropriate or insulting comments will be removed.