Crude oil prices fell today after the Energy Information Administration (EIA) reported a decline of 4.5 million barrels in inventories for the week ending September 20. This drop contrasts with a smaller reduction of 1.6 million barrels the previous week, which followed a slight increase of less than 1 million barrels that had pressured prices.
In addition to the crude oil inventory changes, fuel stocks also saw reductions. Gasoline inventories decreased by 1.5 million barrels during the reporting period, while production averaged 9.8 million barrels per day, up from a minor increase of about 100,000 barrels the week before, when production averaged 9.7 million barrels daily.
For middle distillates, the EIA estimated a draw of 2.2 million barrels, with production averaging 4.9 million barrels per day. This follows a previous week that saw a 100,000-barrel increase in inventories and production of 5.1 million barrels daily.
Oil prices began to decline earlier today as initial excitement over Chinese economic stimulus faded. This left behind ongoing concerns about demand in the world’s largest oil importer. Following the stimulus announcement, benchmark prices rose nearly 2%, but those gains quickly dissipated.
In contrast, the American Petroleum Institute’s (API) weekly inventory report provided some positive news. The API estimated that crude oil inventories fell more than expected, by 4.34 million barrels for the week ending September 20. Prices also received temporary support from a storm approaching the Gulf of Mexico, which could disrupt normal operations in the area. Some crude and natural gas production has already been halted in anticipation of the storm.
Additionally, OPEC‘s latest report, the World Oil Outlook, offered an optimistic view for the market. The cartel raised its long-term oil demand forecast, projecting it will exceed 120 million barrels per day by 2050. This growth is primarily driven by strong demand from non-OECD countries, which are expected to account for most of the increase, according to OPEC.
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