Oil prices rose on Wednesday morning, despite a somewhat surprising EIA inventory report, which reflected an increase in crude oil stocks and gasoline stocks virtually unchanged
Crude oil prices rose today after the Energy Information Administration reported an increase in crude oil inventory of 1.3 million barrels in the week through February 19.
The report came a day after the American Petroleum Institute estimated an increase in oil stocks of more than 1 million barrels. It also compares to analysts’ expectations of a 5.372 million barrel draw in the reported week and a 7.3 million barrel draw in the reported EIA the previous week.
Gasoline inventories surprisingly remained largely unchanged for the week until February 19, after a modest increase of 700,000 barrels the previous week, despite disruptions in refining operations by Texas Freeze.
Gasoline production fell last week as a result of Texas refineries’ shutdowns to 7.7 million bpd. This compared to an average production rate of 9 million bpd during the previous week.
In spirits, the EIA reported a stock decline of 5.0 million barrels for the Texas Freeze week. Average distillate stocks remain above seasonal averages, but are steadily decreasing, currently at 3% above the five-year average.
Distillate production averaged 3.6 million bpd last week, compared to 4.6 million bpd the week before.
Last week’s events in Texas are likely to keep oil prices higher for some time, as production restarts slowly, and some of it may not return at all, as companies leave non-economic marginal wells in spite of the WTI prices above $ 60 a barrel.
A rising bullish sentiment among banks and traders has also contributed to the rise in oil prices recently, especially after Goldman said it expected prices to reach $ 70 and top by summer. The recovery in demand is driving this sentiment, and the interruptions in production in the United States only served to strengthen it further.
At the time of this writing, Brent oil was trading at $ 66.61 a barrel, with West Texas Intermediate at $ 62.76 a barrel.
By Irina Slav for Oilprice.com
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