The bottleneck in North America likely contributed to a 4.9 million barrel rise in US crude oil inventories, to 435.6 million barrels, that the private American Petroleum Institute reported on Tuesday.
OPEC, for its part, estimated that the excess oil inventories in the OECD had shrunk to just 9 million barrels. Diesel inventories are seen down about 2.1 million barrels. Total commercial petroleum inventories decreased by 0.7 million barrels last week.
Crude production continued to grow to record highs, rising 20,000 bpd to 10.72 million bpd last week, the EIA said, though weekly figures are considered less reliable than monthly data. However, if the allies do not step back from their current agreement to withhold 1.8 million barrels day, global markets will get tighter and prices will spike.
However, the tailwinds for crude oil now vastly outnumber the headwinds, so prices will likely continue upwards in the coming days, especially in light of the escalation in Israel following the move of the USA embassy from Tel Aviv to Jerusalem that ignited protests in Gaza, prompting an immediate military response from the IDF. WTI settled at $71.31 on Tuesday and opened at $71.00 Wednesday morning. Distillate fuel production increased last week, averaging over 5.0 million barrels per day. The non-petroleum portion of the deficit rose by $26 billion and the petroleum-based portion improved by almost $4 billion.
Going forward, however, Iran's oil exports are expected to fall.NEW DELHI: India's oil imports from Iran surged to 640,000 barrels per day (bpd) in April, its highest level since October 2016, according to data from shipping and industry sources, as refiners raised purchases ahead of looming United States sanctions against Tehran. Reuters reports that the American oil major is now trying to seize two cargoes of crude and fuel near a terminal in Aruba run by Citgo, a subsidiary of PDVSA.
OPEC's Gulf producers and Russian Federation have about 1.3 million barrels a day of output idle, more than the 1.2 million barrels a day of Iranian exports that were lost when sanctions were previously imposed in 2012, according to the report.
Distillate inventories decreased by 100,000 barrels last week and remain in the lower half of the average range for this time of year.
The recent decision by US President Donald Trump to withdraw from the Iran nuclear agreement has raised fears that renewed sanctions by Washington could severely hit production from the Middle East state, which now produces 3.8 million bpd and exported 2.6 million bpd last month - making it Opec's third-largest supplier.
For the past week, crude imports averaged 7.6 million barrels a day, up by 278,000 barrels a day compared with the previous week. Exports of refined products fell by 176,000 barrels a day last week to 4.64 million barrels a day.
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