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Oil Spikes On Major Inventory Draw



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One day after the American Petroleum Institute pushed oil prices higher by estimating a stock mark of as much as 7.55 million barrels in the previous week, the Energy Information Administration reported a 1

2.8 million barrel of crude oil inventories, pushing prices further up significantly. This is the largest decline in inventory for at least one year.

Yesterday, following API's report broke, Brent roared at its highest price level for nearly four weeks, as the oil market once again dances to the excitement of the Middle East, with hostilities between Washington and Tehran increasing further after President Trump announced sanctions against older Iranian governments, including the country's top leader Ali Khamenei.

The API's report on stocks also had a role to play in the upturn, but this role has proven to be a minor one every week as emotions reverse in hours when the EIA comes out with the official inventory figures. This week, however, contributed to a significant price increase, as analysts had expected a much smaller draw of around 2.5 million barrels.

Today, the government also reported a 1 million barrels of petrol stock a week until June 21, compared to a 1.7 million barrel a week earlier. Production stood at 10.5 million bpd, while a week earlier averaged 10.4 million bpd.

In distillate fuel, the authority reported a fall in inventory of 2.4 million barrels last week, as compared to a small draw of 600,000 barrels per week. week earlier. Distillate fuel production averaged 5.3 million bpd last week, compared to 5.4 million bpd a week earlier.

By writing, Brent crude traded at USD 65.22 a barrel, with West Texas Intermediate at $ 59.17 per barrel, both higher than yesterday's closeness thanks to the API estimate and the worsening US Iranian situation. The next big event – unexpected assumptions – will be OPEC's meeting on production next week. It will divert some attention from the Middle East policy, but will undoubtedly significantly increase price volatility as well.

By Irina Slav for Oilprice.com

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