Crude oil prices inched up after the EIA reported a smaller-than-expected build of 5.9 million barrels in crude oil inventories for the week to September 8, after a 4.6-million-barrel build in the prior week due to the Gulf Coast refinery shutdowns.
A day earlier the American Petroleum Institute had estimated crude oil inventories had risen for the second week in a row, by a hefty 6.18 million barrels, which was only to be expected as the market is prepared for the Hurricane Harvey effects on Gulf Coast refining to linger for another few weeks.
Yet refineries are coming back online and they are raising gasoline production, the latest figures suggest. EIA said that last week refineries processed 14.1 million barrels of crude daily, producing 9.9 million barrels of gasoline daily. This compares with daily runs of 14.5 million bpd and gasoline production of 9.5 million bpd a week earlier.
Gasoline inventories, according to the EIA fell last week, by 8.4 million barrels, generally in tune with API's estimate of a 7.896-million-barrel decline—and the largest gasoline draw on record. This could reinforce any effect EIA's oil inventory figures would have on prices but to what extent, remains uncertain.
In its latest Short-Term Energy Outlook, out on Tuesday, the EIA said that the effect of the supply disruptions on the Gulf Coast will last for a while, which would boost the uncertainty around oil and gas prices in the coming weeks.
In refining, the EIA projected an average daily rate of 15.3 million bpd for September, down from 17.1 million bpd in August. This, however, would recover somewhat in October, to an average of 15.9 million bpd, the authority said. In production, the EIA forecasts an average daily of 9.3 million bpd for this year, and 9.8 million bpd for 2018.
Oil prices, which have recently received some support from reports about discussions of another possible extension of the OPEC production cut deal, remained stable following the release of the EIA report, with WTI trading at US$48.75 a barrel and Brent crude at US$54.62 a barrel.
By Irina Slav for Oilprice.com