Oil Rallies On EIA Inventories Drop

Crude Inventories Fall

Crude oil prices have been firmly higher this week, lifted mainly by the ongoing improvement in risk appetite. Price was also helped by the latest report from the Energy Information Administration.

The EIA reported that in the week ending December 11th, US crude inventories fell by 3.1 million barrels. This surpassed analyst expectations for a 1.9 million-barrel drop.

This latest decrease brings the overall inventory level down to 500.1 million barrels. This is roughly 10% above the five-year seasonal average.

Gasoline & Distillate Stockpiles Rise

The report shows that gasoline stocks were higher over the week rising by 1 million barrels, slightly less than the 1.6 million barrel increase the market was looking for. Gasoline stocks are now sitting around 4% higher than their five-year seasonal average for this time of year.

Distillate stockpiles were also higher, rising by 0.2 million barrels over the week. This is far less than the 0.8 million barrel increase the market was looking for. Distillate stockpiles are now sitting around 11% higher than their five-year seasonal average.

Imports Fall

Elsewhere, the report shows that US crude imports averaged 5.4 million barrels per day over the week. Looking back across the last four weeks, US crude imports have averaged 5.6 million, 12.1% lower than the same period a year prior.

Refinery crude runs were lower by 253k barrels per day over the week with refinery utilization rates falling by 0.8% to 79.1%. Refinery inputs averaged 14.2 million barrels per day over the week.

Demand Improves

In terms of gauging demand, the total products supplied number averaged 18.9 million barrels per day over the last four weeks, down by roughly 8% on the same period a year prior.

Gasoline products supplied averaged 7.9 million barrels per day over the same period, down 13% from the same period a year prior. Meanwhile, distillate products supplied averaged 3.8 million barrels per day, down 2.8% from the same period a year prior.

Despite the uptick in gasoline and distillate inventories, the headline rise in crude stocks has helped add to the positive risk sentiment sweeping markets at the moment, keeping the near-term outlook bullish for oil prices.

Crude Price Continue Higher

Crude oil prices are continuing to rally above the 43.48 level and are on track to test the 49.60 resistance level next, ahead of the 78.6% retracement of the decline from 2020 highs coming in just above.

Momentum studies are turning higher again here, supporting the move, keeping the short term view firmly bullish for now.