Crude oil prices rose today after the U.S. Energy Information Administration (EIA) reported a drop in crude oil inventories of 5.1 million barrels for the week ending November 29.
This decrease came in contrast to the American Petroleum Institute’s (API) report, which showed an increase of 1.23 million barrels for the same period. The EIA had previously estimated a smaller draw of 1.8 million barrels for the prior week.
In addition to the crude oil draw, the EIA also reported increases in fuel inventories.
For gasoline, the EIA estimated an inventory increase of 2.4 million barrels for the final week of November. This was lower than the 3.3 million barrel rise seen the week before. Gasoline production averaged 9.5 million barrels per day, slightly down from 9.7 million barrels per day the previous week.
In middle distillates, the EIA recorded an inventory rise of 3.4 million barrels for the week ending November 28, a sharp increase compared to the modest 400,000-barrel build in the prior week. Middle distillate production averaged 5.3 million barrels per day, up from 5.1 million barrels per day the week before.
Meanwhile, oil prices have been recovering due to concerns about the ongoing conflicts in the Middle East and Asia, including doubts over the success of the ceasefire between Israel and Hezbollah, tensions in Syria, and a brief martial law declaration in South Korea, which was quickly reversed by the president.
At the time of writing, Brent crude was trading at $73.64 per barrel, and West Texas Intermediate (WTI) was at $69.75 per barrel, both slightly down from their opening prices.
Despite the recent rebound in oil prices, concerns over weaker demand persist. This is especially true after stronger-than-expected factory activity data from China, the world’s largest crude oil importer. Analyst Priyanka Sachdeva from Phillip Nova told Reuters that signals of weaker demand from China could challenge the country’s ability to maintain its dominant share of global oil demand by 2025.
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