The latest American Petroleum Institute (API) weekly inventory data recorded a draw of 6.7mn barrels compared with the expected draw of around 2.3mn barrels and followed the draw of 3.9mn barrels recorded last week. API inventories have now declined for seven consecutive weeks, which indicates a significant underlying market tightening which will offer important underlying protection to prices despite the on-going gasoline concerns.
Cushing stocks increased by 80,000 barrels, which was slightly lower than Monday’s Genscape estimated that inventories at the Cushing facility increased by around 230,000 barrels for the week.
There was also a decline of 3.6mn in gasoline, which will ease over-supply fears to some extent while distillates inventories fell by 2.3mn barrels.
Although gasoline demand has remained close to record levels, but stocks have also continued to increase with over-production at refineries also an important influence. Stocks overall were at record highs in late June. There has been increased speculation that refineries would cut processing rates, which would also effectively limit crude demand.
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