After an unexpected rise of 7.8 billion barrels last week that ended a four-week streak of declines, crude inventories fell again this week, with the American Petroleum Institute (API) reporting a 3,069 barrel decline in inventories.
Analysts were expecting a withdrawal of 0.167 million barrels.
Meanwhile, crude oil stored in the country’s Strategic Petroleum Reserves fell by 211 million barrels, now the lowest since January 1984.
In the week ended December 9, the Department of Energy released 4.7 million barrels from the Strategic Petroleum Reserves, leaving the SPR with just 382 million barrels. On Monday, the Department of Defense’s Office of Petroleum Reserves announced it would begin buying back crude oil for the SPR, which is good business for American taxpayers.
The DoE will buy back crude at lower prices – currently in the $77-80 range – than the average $96 barrels it has sold SPR reserves for this year.
The week before, the API reported a large drawdown in crude inventories of 7.819 million barrels, while the Energy Information Administration (EIA) reported a 10.2 million barrel increase in crude inventories for the week ended December 9th. At 424.1 million barrels, US crude inventories were 6% below the seasonal average over the past five years, the EIA noted in its report last Wednesday.
WTI prices rose on Tuesday as the market reacted to falling OPEC crude oil production in November, according to the organization’s monthly oil market report.
As of 4:35 p.m. EST on the day, WTI was trading slightly over a percentage point to just over $76 a barrel. Brent crude traded slightly lower and struggled to break $80.
By Julianne Geiger for Oilprice.com
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