US Oil Stocks Up 4.5Mln Barrels Last Week, Defying Bets On Summer Travel Kickoff - EIA

Stockpiles of US crude oil rose almost five million barrels last week while fuel inventories were mixed, according to government data on Thursday that bucked expectations that the advent of summer travel would lead to runaway energy demand

WASHINGTON (UrduPoint News / Sputnik - 01st June, 2023) Stockpiles of US crude oil rose almost five million barrels last week while fuel inventories were mixed, according to government data on Thursday that bucked expectations that the advent of summer travel would lead to runaway energy demand.

The US crude inventory balance was higher by 4.5 million barrels during the week ended May 26, the Energy Information Administration (EIA) said in its Weekly Petroleum Status Report.

Analysts polled by US media had forecast a crude draw of around 1.1 million barrels on the average for last week.

In the prior week to May 19, the EIA reported a crude deficit of 12.5 million barrels, the most in six months or since the week ended November 25.

The EIA, meanwhile, reported a draw of 2.6 million barrels from the US Strategic Petroleum Reserve, which the Biden administration has been tapping since late 2021 to ease crude supply tightness in the market. If that were to be added to total draws, the net decline in crude stockpiles last week would be above 14 million barrels.

On the fuel side, the EIA reported larger deficits as well in weekly stockpiles of gasoline and distillates.

On the gasoline inventory front, there was a draw of 0.207 million barrels versus forecasts for a deficit of 0.369 million and the previous weekly decline of 2.053 million. Automotive fuel gasoline is the No. 1 US fuel product.

With distillate stockpiles, the rise was 0.985 million barrels, versus expectations for a draw of 0.118 million and the prior week's deficit of 0.562 million. Distillates are refined into heating oil, diesel for trucks, buses, trains and ships and fuel for jets.

Notwithstanding the bearish stockpiles data, oil prices jumped more than 3% in Thursday's New York session, paring the about 7% loss from three prior days of trading, as short-sellers prepared for the eventuality that the OPEC+ alliance of oil producers could decide to cut output again at their meeting on Sunday.

OPEC+ groups the 13-nation Saudi-led OPEC, or Organization of the Petroleum Exporting Countries, with 10 other oil producers steered by Russia.

By 11:55 ET (15:55 GMT), New York-traded West Texas Intermediate, or WTI, crude was up $2.57, or 3.8%, to $70.66 per barrel. In the previous session, it hit a four-week low of $67.07.

London-traded Brent crude was up $2.33, or 3.2%, to $74.93. The global benchmark for oil hit a four-week low of $71.53 on Wednesday.

Despite the concerns of short sellers over further production cuts by OPEC+, the alliance has actually had limited success over the past two months in trying to push crude prices up with output reductions.

OPEC+ announced a 1.7 million-barrel-per-day cut in April, on top of an October undertaking to shed 2 million barrels daily.

After the April cut was announced, crude prices only went up for two weeks, before turning lower over four weeks, erasing some 15%. The earlier pledge to cut 2 million barrels fared worse, resulting in just a few days of gains before prices tumbled to 15-month lows in March.

Last week, Saudi Energy Minister Abdulaziz bin Salman issued a warning to the short sellers in oil, hinting at further cuts. But Russian President Vladimir Putin later said oil prices were approaching "economically justified" levels, indicating that more output reductions might not be required in Moscow's opinion.