Strongest decline in US crude oil production for years

The slump in drilling activity, the oil rig count is still more than 50% below its start-of-year level despite the recent increase, makes a further fall in US oil production in the coming months probable. 

For August, for example, the US Energy Information Administration envisages US crude oil production of just shy of 9.4 million barrels, which makes the decrease reported yesterday appear plausible. 

"On the demand side, there was a slight fall in crude oil processing, though at just short of 16.8 million barrels per day it still remains at an extremely high level. Although gasoline demand dropped sharply, it remained above the year-on-year level, supporting a further reduction of gasoline stocks", says Commerzbank. 

The distillate inventory build continued, on the other hand, stocks rising by 2.6 million barrels and now finding themselves at their highest level since February 2012.