Oil prices fell today, even after US Energy Information Administration announcement report Crude inventories fell by 3.7 million barrels in the week ending Nov. 18.
This compares with a decline of 5.4 million barrels in the previous week and an estimated 4.8 million barrels decline in the week ending November 18, according to the American Petroleum Institute report.
Amid the recent drop in oil prices sparked by expectations that a Covid flare-up would slow demand growth in China, the EIA said U.S. crude inventories were at 431.7 million barrels, down from a five-year seasonal average of said it was 5% below
At the time of writing, Brent crude is trading at $85.10 a barrel, down more than 3.5%, while West Texas Intermediate is down nearly 4% at $77.87 a barrel.
Fuels were a different story, with both gasoline and diesel stocks rising.
In gasoline, the EIA estimated an inventory increase of 3.1 million barrels in the week to 18 November.
Gasoline production averaged 9.2 million barrels per day last week, compared with 9.8 million barrels the previous week.
In middle distillates, the EIA reported an increase in stocks of 1.7 million barrels, with production averaging 5.1 million barrels per day.
This compares with a build-up of 1.1 million barrels last week and a production rate of 5.1 million bpd.
Oil prices were stable earlier this week as concerns about the impact of China’s latest coronavirus outbreak on demand were largely offset by worries about oil supplies ahead of the EU’s embargo on Russian oil. The embargo also includes punitive measures against third parties who buy Russian oil unless they buy at the ceiling price set by the EU and the G7.
Today, however, concerns over Chinese demand have sparked a further drop in prices.
On the other hand, the diesel shortage looming over the global economy creep up Since the beginning of the year, prices have risen 50% in the U.S. spot market, but they are also rising around the world. In the United States alone, the impact of a diesel shortage could reach $100 billion, according to Rice University researchers.
By Irina Slav for Oilprice.com
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