The price of OPEC basket of fourteen crudes stood at 62.16 US dollars a barrel on Wednesday, compared with 61.72 US dollars a barrel on Tuesday, according to OPEC Secretariat calculations.
The Energy Information Administration reported yet another inventory draw for last week, making it the fifth one in a row with falling inventories. The authority said inventories had gone down by 6.5 million barrels, to 436.5 million barrels, Oil Price reported on Thursday.
Analysts had expected a draw of 4.5 million barrels, more modest than API’s latest estimate that pegged crude oil inventories 5.2 million barrels lower last week.
Yet traders are not only watching crude oil inventory movements: gasoline stockpiles last week jumped by 1.2 million barrels, the EIA said. This could dampen the bullish mood among market participants, though not by much as there are other events speculators are watching, such as the growth in US shale production and international politics. Last week the bullish bets on WTI stood at a nine-month high, data from CFTC showed.
Refineries processed 17.1 million barrels of crude per day last week and produced 10.1 million barrels per day of gasoline, unchanged from the week before.
Interestingly, as inventories have been falling over the past five weeks, production of crude oil in the United States has been growing. The daily rate reached 9.78 million barrels in the week to December 8, from 8.95 million bpd at the start of the year. All forecasts point to a consistent further increase in US production, which may well undermine OPEC and Russia’s production cut efforts.
Meanwhile, WTI has been benefitting by the Forties pipeline shutdown, although the shutdown’s impact on Brent, the international benchmark, has been more pronounced. Earlier this week, Ineos, the operator of the pipeline, said the shutdown could last for a month as custom parts needed to be made. According to Bloomberg, the shutdown could take some 5.5-13 million barrels from global oil markets for the duration.
At the time of writing, WTI traded at US$57.73 a barrel while Brent was at US$63.50.
The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).