Crude oil prices remained elevated today after the U.S. Energy Information Administration reported crude oil inventories had shed 2.6 million barrels in the week to February 25.
This compared with a build of 4.5 million barrels for the previous, which also failed to reverse the direction of oil prices as it was reported a day before the Russian invasion of Ukraine when the heightened geopolitical tensions in the region had already pushed prices higher.
The EIA also reported a draw in gasoline inventories and a decline in middle distillate stocks.
In gasoline, the authority estimated an inventory decline of 500,000 barrels for the last week of February, with production seen at 9.3 million bpd.
This compared with a gasoline stock decline of 600,000 barrels for the previous week and production of about 9.3 million bpd, slightly less than last week’s.
In middle distillates, the EIA estimated an inventory draw of 600,000 barrels for the week to February 25, with production averaging a bit over 4.7 million bpd.
This compared with a middle distillate inventory draw of 600,000 barrels for the previous week and production of 4.7 million bpd in the last week of February.
Brent crude hit $111 per barrel earlier today, with West Texas Intermediate at over $109 per barrel amid the growing chaos on energy markets as sanctions against Russia caused the pullout of major Western energy companies from the country and traders shunning Russian oil cargos.
In a tight supply situation, there has only been one way prices could go, prompting the U.S. to urge its allies and fellow members of the International Energy Agency to co-ordinate a release of stockpiled oil to weigh on benchmarks.
The agreement was reached on Tuesday, when several IEA members led by the U.S. said they would release a combined 60 million barrels of crude. According to analysts, however, the move is unlikely to move international prices all that much, based on how the previous release of crude from strategic reserves failed to accomplish its goal of reducing oil prices.