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In the most recent Weekly Petroleum Status report released by the Energy Information Administration (EIA), US crude oil inventories exhibited a significant decline of 6.3 million barrels. This unexpected drop surpassed analyst expectations, as the consensus had predicted a decrease of only 2.06 million barrels.
Strategic Petroleum Reserve Grows to 350.3 Million Barrels
The Strategic Petroleum Reserve also witnessed growth, increasing from 349.5 million barrels to 350.3 million barrels. This expansion signifies that the United States continued its oil purchases for strategic reserves. Such purchases serve as an additional positive catalyst for oil markets.
Domestic Oil Production Remains Steady US crude oil inventories
Despite these developments, domestic oil production in the US remained unchanged at 12.8 million barrels per day (bpd). This stability in production suggests that, at this point, the escalating oil prices have not provided sufficient incentives. In addition to push production beyond the 13.0 million bpd level.
Market Reactions and Current Oil Prices
Interestingly, the oil markets did not exhibit a strong reaction to the EIA report. West Texas Intermediate (WTI) oil continued to trade near the $87.50 level. While Brent oil remained close to the $90.50 level.
It appears that traders decided to take some profits off the table following a strong rally. Thus, rendering the bullish report insufficient to provide immediate support to oil prices. Additionally, concerns regarding the global economy’s health and the potential for a rate hike from the Federal Reserve have emerged as additional negative catalysts influencing oil markets.
Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions
