At the Multi Commodity Exchange, crude oil for delivery in December was trading sharply lower by Rs 26, or 0.70 per cent, to Rs 3,698 per barrel in 1,601 lots. A day later, however, the EIA reported a 3.4-million-barrel draw, more in line with analyst expectations.
In parallel, oil imports declined by 127,000 barrels a day from the week before to an average rate of 7.2m b/d. Inventories at Cushing probably slid by 2.4 million barrels, a separate forecast compiled by Bloomberg showed.
But more notably, the API had yesterday reported a staggering 9.196-million-barrel build in gasoline inventories-when analysts had expected a small build of just 1.145 million barrels.
"We were overdue a little bit of profit-taking and the build up in gasoline inventories was the ideal excuse to do just that", said Michael Hewson, chief market analyst at brokerage CMC Markets. "If they do adhere, that will keep the oil price elevated". WTI settled at $57.62 on Tuesday and opened at $57.45 Wednesday morning. Distillate product supplied averaged over 3.9 million barrels a day for the past four weeks, up by 0.6% compared with the same period a year ago.
Distillate inventories also saw a build this week, rising 4.259-million barrels, against a forecast of a 548,000-barrel build. Distillate production averaged 5.4 million barrels a day last week, up about 100,000 barrels a day compared to the prior week's production.
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Refineries operated at 93.8% of their capacity during the same week, the EIA said.
"Yet should the supply outlook fail to worsen, the odds are that oil prices will hover around current levels until next June", Brennock added. The global benchmark crude traded at a premium of $5.19 to February WTI.
Chevron Corp. (NYSE: CVX) traded down about 0.2%, at $120.10 in a 52-week range of $102.55 to $122.30.
The accord was first struck a year ago with the aim of draining the global oil glut and boosting prices.