Oil reserves fall in the US and sustain prices

Oil reserves fall in the US and sustain prices

A crude oil storage facility on May 4, 2020 in Cushing, Oklahoma

© Johannes EISELE
A crude oil storage facility on May 4, 2020 in Cushing, Oklahoma

Commercial crude oil reserves in the United States fell more than analysts expected in the week ending October 9 after Hurricane Delta passed through the Gulf of Mexico, and oil ended stable on Thursday.

A barrel of Brent from the North Sea for delivery in December was at $ 43.16 in London, down 0.4%.

And in New York, a barrel of WTI for November lost 0.2% to $ 40.96.

On Wednesday the two benchmark contracts gained more than 2% helped by a weaker dollar that made crude cheaper for investors in other currencies.

The report on a reduction in stocks in the United States helped to reduce the price drop on Thursday morning, precipitated by the worsening of the second wave of covid-19 that threatens the revival of demand in Europe.

– Low reserves –

According to the weekly report published this Thursday – one day later than usual for Monday’s holiday – by the US Energy Information Agency (EIA), reserves fell 3.8 million barrels (mb) to 489.1 mb .

Analysts had expected a 2.1 mb cut. However, stocks are still 11% above the average of the last five years, in a context of weak demand due to the coronavirus pandemic that reduced energy consumption.

The fall in reserves last week is explained by a production drop of half a million barrels per day (mbd) to 10.5 mbd. Imports also fell from 5.7 mbd to 5.3 mbd.

“A sharp drop in production and imports after Hurricane Delta last week pushed stocks,” explained Matt Smith of Commodities Research.

“The hurricane also hampered oil exports, while refinery activity fell,” he noted.

Exports fell 524 mbd, to settle at 2.1 mbd.

Due to the interruptions in the Gulf of Mexico due to Hurricane Delta, US refineries worked at 75.1% of their capacity against 77.1% the previous week.

Gasoline reserves fell by 225.1 mb, 1.6 mb below the previous record, as predicted by analysts.

Stocks of distilled products fell 7.2 mb, higher than expected by the market, which expected a decrease of 1.7 mb.

On the demand side, the consumption of oil products stood at 18.4 mbd in the last four weeks, an increase of half a million barrels per day over the record of the previous week, but also 12.6% below the same 2019 period.

In the Cushing, Oklahoma terminal, where the oil that serves as a reference to the WTI is stored, there was an increase in reserves from 2.9 mb to 59.4 mb.



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