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Crash In Crude Inventories Sends Oil Prices Higher

Crude Oil Inventories

The American Petroleum Institute (API) has reported a massive 11.486-million-barrel draw in U.S. crude inventories, compared with the previous week’s 2.418-million-barrel draw as the markets weigh China’s economic activity against U.S. crude inventories.

Analysts were expecting an inventory draw of 2.9 million barrels for the week. The total number of barrels of crude oil gained so far this year is just shy of 4 million barrels, according to API data, although there is a net draw in crude inventories since April of almost 44 million barrels.
On Monday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by another 600,000 barrels in the week ending August 21, with the SPR inventory still sitting at a near 40-year low of 349.5 million barrels. At the current replenishment rate, the SPR should return to 2021 levels in a little under a decade.

The outcome of the Jackson Hole meeting and interest rate decisions could impact financial and energy markets

On Saturday, the Euro fell to its lowest level of value since mid-June, possibly due to the European Central Bank considering halting interest rate hikes soon. Meanwhile, the Dollar also paused its movement ahead of Federal Reserve Chair Jerome Powell’s speech. Reuters, citing 8 informed sources, reported that European Central Bank policymakers are increasingly concerned about weakening economic growth prospects. Despite ongoing discussions, the move to halt interest rate increases is currently in progress.
Key officials from the US Federal Reserve, European Central Bank, UK, and Japan will convene at the annual Jackson Hole meeting in 2023. The outcomes of this meeting could impact worldwide financial and energy markets.

Oil and bitumen markets

Oil prices rose this week, with Brent trading in the 87 USD range on Thursday.

In the Middle East, bitumen in Bahrain is $440, and bitumen in Singapore is $470.

Bitumen in South Korea is $425, and bitumen in Spain is $517.

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Crash In Crude Inventories Sends Oil Prices Higher