API Reports Another Crude Draw As EIA Raises Oil Demand Forecast

Crude oil inventories in the United States fell this week by 1.9 million barrels for the week ending July 5, according to The American Petroleum Institute (API), after analysts had expected a 250,000-barrel draw.

For the week prior, the API reported a surprise 9.163-million-barrel draw in crude inventories.

On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 500,000 barrels as of July 5. Inventories are now at 373.1 million, up from 372.6 million barrels the previous week. That is the highest level since December 2022, but still short of the 656 million barrels in inventory in June 2020.

Oil prices were trading down ahead of the API data release on Tuesday. At 4:17 am ET, Brent crude was trading down 1.06% on the day at $84.84-and up about $1 per barrel from this time last week. The U.S. benchmark WTI was also trading down 0.84% on the day at $81.64-down about 0.87% from this time last week.

Gasoline inventories fell by 3 million barrels this week, after last week’s 2.468-million-barrel increase.

The inventory outlier was distillates, which saw a 2.3-million-barrel increase in stockpiles, compared to last week’s 740,009-barrel draw.

Cushing inventories were down 1.2 million barrels this week, according to API data, after rising by 404,000 barrels in the previous week.

On Tuesday, the Energy Information Administration (EIA) raised its 2024 demand estimate to 1.11 million barrels per day-up from 1.08 million bpd-while also raising the 2025 estimate from 1.53 mbpd to 1.77 mbpd, noting that the global oil market is heading for a supply deficit next year.

The EIA’s demand upgrade follows the June extension of must OPEC+ output cuts into 2025 to strengthen lagging demand growth.

By Julianne Geiger for Oilprice.com

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