Oil futures experienced a boost on Tuesday as industry data revealed a significant decrease in U.S. crude inventories, indicating robust demand.
Price Action
- West Texas Intermediate (WTI) crude for September delivery was up 0.6% at $81.87 a barrel on the New York Mercantile Exchange.
- October Brent crude, the global benchmark, rose 0.5% to $85.35 a barrel on ICE Futures Europe.
Market Drivers
According to the American Petroleum Institute, U.S. crude inventories dropped by 15 million barrels last week. Gasoline stocks also fell by 1.7 million barrels, while distillates decreased by 512,000 barrels.
Analysts from ING, Ewa Manthey and Warren Patterson, noted that if the drop in crude is confirmed by the Energy Information Administration’s official data, it would be the largest weekly inventory drawdown since 1982.
As per a survey conducted by S&P Global Commodity Insights, analysts anticipate a decline of 3.7 million barrels in crude inventories and a drop of 1 million barrels in gasoline stocks for the previous week. Distillate inventories are also expected to decrease by 400,000 barrels.
On another note, a Bloomberg survey revealed that OPEC’s output decreased by 900,000 barrels per day in July, reaching its lowest level since 2020. Saudi Arabia led the decline with a reduction of 810,000 barrels per day, bringing their daily production to 9.15 million barrels.
It’s worth mentioning that Saudi Arabia previously announced a production cut of 1 million barrels per day for August. Many analysts anticipate that this cut will be extended through September, with an announcement expected later this week.
