EIA Reports Crude Oil Inventories Fell 7.6 million Barrels, WTI Oil Prices Move Lower

The latest Energy Information Administration (EIA) data recorded an inventory draw of 7.56 million barrels for the week ending July 7th following a draw of 6.3 million barrels the previous week.

Consensus forecasts were for a decline of 2.5 million barrels, although markets were expecting a larger decline after the API data.

Crude inventories declined to 495.4 million barrels, but were still 0.9% higher on the year. Refinery use increased 0.9% on the week following a 1.1% gain the previous week.

Cushing inventories recorded a further draw of 1.95 million barrels on the week, maintaining the run of strong draws.

Domestic crude production recorded an increase of 0.06% on the week at 9.40mn bpd and an increase of 10.7% over the year.

Gasoline inventories recorded a draw of 1.6 million barrels on the week with a 1.8% annual decline while distillate recorded a build of 3.1 million barrels with a year-on-year increase of 0.4%.

The gasoline data will offer some relief and there has been evidence of strong gasoline demand which will help underpin prices in the short term, especially with the scope for a further increase in refinery use.

The API data had recorded a draw of 8.1 million barrels on the week which had helped trigger a further sharp recovery in oil prices.

WTI crude prices immediately rallied to the $46.40 p/b area on release before dipping lower again to test support below $46.00 and, after a brief rally, dipping to lows around $45.70.

Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.