US crude oil stocks decreased by 5.5 MMBbl. Gasoline inventories increased 2.0 MMBbl and distillate inventories decreased 0.2 MMBbl. Yesterday afternoon, API reported a large crude oil draw of 7.9 MMBbl alongside gasoline and distillate builds of 0.56 MMBbl and 1.68 MMBbl, respectively. Analysts were expecting a smaller crude oil draw of 1.8 MMBbl. Total petroleum inventories posted a large decrease of 10.2 MMBbl.
US crude oil production increased 100 MBbl/d last week, per EIA. Crude oil imports were up 0.23 MMBbl/d last week to an average of 6.8 MMBbl/d. Refinery inputs averaged 17.0 MMBbl/d (0.42 MMBbl/d more than last week’s average).
WTI futures continued to trend upward this week amid thin holiday trading, with the prompt February contract settling at $61.68/Bbl on Thursday (up $1.27/Bbl from Monday’s open). Optimism over the pending “Phase 1” US-China trade deal and hopes that deeper OPEC+ production cuts in the first quarter of the New Year will mop up surplus supplies are the key drivers of the rally, despite forecasts of large global inventory builds by the IEA and other analysts. Month-to-date, prompt WTI futures are up $5.72/Bbl (11.8%).