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Crude oil prices moved higher today, after the U.S. Energy Information Administration reported an inventory dip of 2 million barrels for the second week of the year.
The change estimated by the EIA compared with a modest draw of around 1 million barrels for the previous week, which also saw sizable builds in fuel inventories that dragged oil prices lower.
For the week to January 10, the EIA estimated an inventory build of 5.9 million in gasoline, with production averaging 9.3 million barrels daily. This compared with a build of as much as 6.3 million barrels for the previous week, when production averaged 8.9 million barrels daily. That build was the second sizable weekly one, after 2024 ended with a build of 7.7 million barrels in gasoline inventories.
In middle distillates, the EIA estimated an inventory increase of 3.1 million barrels for the week to January 10, with production at an average 5.2 million barrels daily. The numbers compared with a build of 6.1 million barrels for the first week of the month and the year, when production averaged 5.2 million barrels.
Even with the recent series of builds in fuels, however, both gasoline and middle distillate stocks remained below the five-year average for this time of the year, the EIA noted in consecutive weekly reports.
Oil prices, meanwhile, took a dip earlier in the week after the EIA released the latest edition of its Short-Term Energy Outlook saying global supply would exceed demand both this year and next. Based on that forecast, the EIA projected the average 2025 price for Brent crude at $74 per barrel, with West Texas Intermediate seen at an average $70 per barrel in 2025.
For its forecast, the EIA assumed that OPEC+ would roll back its production cuts and that non-OPEC production would continue leaping forward. The market, meanwhile, seems more preoccupied with the effect of the latest U.S. sanctions on Russia, which could curb global oil supply by close to 1 million barrels daily. Apparently, traders don’t currently share the EIA’s expectations of excess supply.
At the time of writing, Brent crude was trading at $81.09 per barrel, with WTI at $79.12 per barrel, both up from opening.
By Irina Slav for Oilprice.com
The post Oil Rises as Crude Inventories Continue to Draw appeared first on Energy News Beat.
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