Friday, December 3, 2021

Crude Prices Decline After EIA Reported A 2.3 Million Barrels Build

On Wednesday morning, EIA(The U.S. Energy Administration) reported a 2.3 million build from the U.S. crude stockpiles last week, beating the expectation of a modest draw of 418,000 barrels. Total crude oil stocks in the US rose for two consecutive weeks to a total of 420.9 million barrels, but still below the five-year average.  

Meanwhile, refinery inputs have recovered to 15.74 million barrels per day. Domestic oil production has also rebounded back to 11.3 million barrels per day last week, as production recovering from shut-ins during hurricane Ida.

In gasoline section, total stocks increased by 3.3 million barrels for the week to October 1st. US gasoline demand continues to rise after rallying the entire month of September, reporting of 9.4 million barrels per day last week, equivalent to peak demand of summer this year.

In distillate section, diesel fuel prices and heating oil prices continue to soar, and stockpiles show a small draw of 396,000 barrels as the weather turns cold. Demand for distillate is reported of 4.4 million barrels per day, significantly higher than a year ago.  

According to the chief executive of Saudi Aramco, global oil demand will increase by 500,000 barrels per day due to the natural gas crunch. Analysts from Goldman Sachs seem to share this view, upgrading Brent crude prices to 90 dollars for the 4th quarter this year. 

In short term, crude prices face headwinds from uncertainty over the issue of the US debt limit as lawmakers from both sides continue the debate in Capitol Hill. And on technical levels, it appears that WTI prices are still facing resistance near $78.5 level, losing the momentum further after falling below $77.




Jiayang Shao
I am a political and financial news writer who focus on global events. One of my biggest interests is to look at how government policy, geopolitics, macroeconomics, and supply, demand influence the oil market. During my spare time, I trade energy equity and crude oil futures.

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