The American Petroleum Institute (API) reported on Tuesday a draw in crude oil inventories of 8.587 million barrels for the week ending July 31.
Analysts had predicted a modest inventory draw of 3.267-million barrels.
In the previous week, the API reported a significant—and unexpected–draw in crude oil inventories of 6.829 million barrels, after analysts had predicted a small build.
West Texas Intermediate crude was trading up on Tuesday afternoon before the API’s data release, as the market largely expected an inventory draw, ignoring the kickoff of OPEC’s reduced production cut that went into effect on August 1.
Oil production in the United States has now fallen from 13.1 million bpd on March 13 to 11.1 million bpd for July 24, where it sat for the second week in a row, according to the Energy Information Administration.
At 2 pm EDT on Tuesday, the WTI benchmark was trading up on the day by $1 (+2.44%) at $42.01—about $1 above last week’s levels. The price of a Brent barrel was trading up as well, by $0.62 (+1.40%), at $44.77—up a little more than $1 per barrel than this time last week.
The API reported a draw of 1.748 million barrels of gasoline for the week ending July 31—compared to last week’s 1.083-million-barrel build. This week’s draw compares to analyst expectations for a 170,000-barrel draw for the week.