Crude oil prices were flat on the day, after the U.S. Energy Information Administration reported an estimated inventory draw of 1 million barrels for the first week of 2025.
The authority also estimated builds in fuel inventories but both gasoline and diesel stocks remain below the five-year average.
The crude inventory draw compared with another modest of 1.2 million barrels for the last week of 2024, which was accompanied by substantial builds in gasoline and middle distillates that failed to elicit a bearish response from the market at the time.
This week, oil has been trending higher already on signs of a tighter market and an American Petroleum Institute inventory report that saw crude oil stocks shedding a sizable 4 million barrels in the first week of January. The API also estimated another round of hefty inventory builds in fuels.
In gasoline, the Energy Information Administration estimated an inventory jump of 6.3 million barrels for the period, with production at an average 8.9 million barrels daily.
This compared with an inventory build of as much as 7.7 million barrels for the last week of 2024, when production averaged 9 million barrels daily.
In middle distillates, the EIA estimated a stock build of 6.1 million barrels, with production averaging 5.2 million barrels daily.
Oil prices, meanwhile, have been trending higher this week, driven by expectations of a tighter global supply situation after Trump takes office and reports suggesting OPEC+ output declined in December.
Trades have been boosting their bullish positions in oil over the past weeks, in anticipation of Trump’s taking office and immediately taking action on stricter sanction enforcement against Iran. Some observers also expect demand weakness to peak this year, rather than continue to deepen.
Some, however, remain bearish. “We are holding to our forecast for Brent crude to average $76/bbl in 2025, down from an average of $80/bbl in 2024,” BMI analysts said this week in a note, as quoted by Reuters. “The bearish view is being led by our fundamental data forecast, which points to an oversupply this year, with supply growth outstripping demand growth by 485,000 barrels per day,” they also said.
The post Large Jump in Fuel Inventories Outweighs Crude Draw appeared first on Energy News Beat.
Energy News Beat