Oil prices yesterday were able to recoup some of the heavy losses they had suffered the day before. Brent increased by 1.6% to $65 per barrel while WTI even gained 3% to reach $59 per barrel.
Prices are continuing their recovery this morning, receiving tailwind from the inventory data published by the US Department of Energy yesterday afternoon. US crude oil stocks decreased by 2.7 million barrels last week and thus for the third consecutive week. Besides a significant rise in crude oil processing, a noticeable decline in US crude oil production played its part in this.
US crude oil production dropped by 112,000 to 9.26 million barrels per day, putting it at its lowest level since early February, notes Capital Economics. The unusually sharp fall in production was due to Alaska, however, on account of seasonal maintenance work that is being carried out at oil fields there. This should not be seen as a sign that the considerable decline in drilling activity is beginning to impact on (shale) oil production.
Despite the increase in refinery utilization, stocks of oil products were also reduced noticeably, gasoline stocks falling by 2.8 million barrels and distillate stocks down by 546,000 barrels. This points to robust gasoline demand just before the summer driving season gets underway this weekend.
