The American Petroleum Institute (API) estimated on Tuesday a huge draw in crude oil inventories of 8.322 million barrels for the week ending July 10.
Analysts had predicted an inventory much smaller inventory draw of 2.275 million barrels.
In the previous week, the API reported an increase in crude oil inventories of 2.048 million barrels, after analysts had predicted a larger build.
WTI was trading down on Tuesday afternoon prior to the API’s data release with prices responding to the likelihood that OPEC+ would decide to decrease its level of production cuts as of August 1, and potentially slowing the inventory drawdown.
Oil production in the United States has now fallen from 13.1 million bpd on March 13 to 11 million bpd for July 3, according to the Energy Information Administration, for the third week in a row. Production has rebounded somewhat from week ending June 12, which saw an average of 10.5 million bpd produced.
At 7:13 am EDT on Tuesday the WTI benchmark was trading down on the day by $0.37 (-0.92%) at $39.73. The price of a Brent barrel was trading down on Tuesday as well, by $0.29 (-0.68%), at $42.43—both benchmarks are trading essentially flat on the week.
The API reported a draw of 3.611 million barrels of gasoline for week ending July 10—compared to last week’s 1.825-barrel draw. This week’s draw compares to analyst expectations for a 900,000-barrel draw for the week.
Distillate inventories were up by 3.03 million barrels for the week, compared to last week’s 847,000-barrel draw, while Cushing inventories saw a build of 548,000 barrels.