By Irina Slav
Crude oil prices inched higher today, after the U.S. Energy Information Administration reported an inventory decline of 5.4 million barrels for the week to November 11.
This compares with an inventory build of 3.9 million barrels for the previous week, which pushed prices lower last week.
In fuels, the EIA reported inventory builds.
Gasoline inventories added 2.2 million barrels over the week to November 11, with production averaging 9.8 million barrels per day, up slightly on the week.
This compared with an inventory draw of 900,000 barrels for the previous week and production of 9.8 million barrels daily. Gasoline prices across most of the United States have continued trending lower despite inventory movements.
In middle distillates, the EIA estimated an inventory increase of 1.1 million barrels for the week to November 11. This compared with a draw of 500,000 barrels for the previous week.
Middle distillate production averaged 5.1 million barrels daily last week, which compared with 5.2 million barrels daily for the previous week.
Middle distillate inventories in the United States are at a multi-decade low, causing concern about the security of heating oil supply for the winter, especially in the Northeast, where several million households rely on heating oil for their winter needs.
In fact, the concern is so serious that Energy Secretary Jennifer Granholm said this week that fuel export controls may need to be implemented to ensure domestic supply.
Crude oil rose on Tuesday, following reports that the flow of Russian oil along the Druzhba pipeline is falling, and at the time of writing both Brent crude and West Texas Intermediate were trending lower, having shed close to 2 percent for Brent and more than 2 percent for WTI.
Meanwhile, the International Energy Agency warned of significant uncertainties on the oil market, noting China’s weak economy, Europe’s energy crisis, surging product cracks, and the strong U.S. dollar are all weighing heavily on consumption.
At the same time, the IEA pointed out that “The approaching EU embargoes on Russian crude and oil product imports and a ban on maritime services will add further pressure on global oil balances, and, in particular, on already exceptionally tight diesel markets,” deepening already significant concern about the global supply of middle distillates.