Energy

Crude Oil Price Jumps Sharply on Surprise Inventory Drawdown

Paul Ausick

Published: May 11, 2016 11:10 am

Last Updated: January 13, 2020 9:33 am

The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning. U.S. commercial crude inventories decreased by 3.4 million barrels last week, maintaining a total U.S. commercial crude inventory of 540 million barrels. The commercial crude inventory remains at historically high levels for this time of year, according to the EIA.

Tuesday evening the American Petroleum Institute (API) reported that crude inventories rose by 3.5 million barrels in the week ending May 6. API also reported gasoline supplies rose by 300,000 barrels and distillate stockpiles fell by 1.4 million barrels. For the same period, analysts had estimated an increase of around 400,000 barrels in crude inventories, along with a decline of 600,000 barrels in gasoline supplies and an 800,000-barrel decline in distillates.

Total gasoline inventories decreased by 1.2 million barrels last week, according to the EIA, but remain well above the upper limit of the five-year average range. Total motor gasoline supplied (the agency’s measure of consumption) averaged 9.5 million barrels a day for the past four weeks, up by 5.1% compared with the same period a year ago.

A massive wildfire in the oil sands region of Alberta has shut down around 1 million barrels a day of production. There was no loss of life reported as a result of the fire and little to no damage to the industry’s facilities around Fort McMurray. But because more than 85,000 people were evacuated, restarting production could take more time than anticipated. Politically triggered output declines have also plagued Nigeria and Libya.

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