Towards the end of the week, Brent oil rose in spite of rising pressure regarding economic growth concerns while US inventories fell sharply to boost West Texas Intermediate (WTI) crude futures at the same time. Indeed, the international benchmark Brent crude saw a 51 cent price bump—to $61 per barrel, on Thursday—while US benchmark WTI jumped 87 cents (about 1.7 percent) to $56.71 per barrel.
All of this comes off the heels of US government data that shows a crude stockpile roughly twice what had been expected. A decline in oil inventories, last week, was the biggest such drop, in the United States, in more than a month, coinciding with a similar fall in gasoline and distillate supplies. Specifically, the United States government’s Energy Information Administration described that American crude stocks are down approximately 10 million barrels with gasoline and distillate stocks down more than 2 million barrels.
Earlier in the week, the American Petroleum Institute had reported US crude stocks were down 11.1 million barrels the week before. For the week leading up to August 23, the EIA reported crude production in the US increased 200,000 barrels per day, reaching a new record of 12.5 million bpd.
Of course, it is still a bit early to tell what type of impact this is going to have in the long term. After all, the oil market—as a whole—was in bear territory only a few weeks ago at a time when the global economy is amid a slowdown. And much of these concerns are definitely related to worries about the trade relationship between the United States and China.
Last week, refineries processed 17.4 million barrels per day, resulting in 10.7 million bpd of gasoline and 5.2 million barrels of distillate fuels. This is better than the average daily production of 9.9 million bpd of gasoline and 5.3 million bpd of distillate fuels from the week before.