MOSCOW (MRC) -- Oil prices rose on Wednesday, extending strong gains in the previous session, after industry data showed US crude stocks unexpectedly fell last week just as near term travel demand picked up with pandemic curbs easing, reported Reuters.
US West Texas Intermediate (WTI) crude futures rose 23 cents, or 0.3%, to USD84.38 a bbl at 0132 GMT, adding to a 2.7% gain on Tuesday.
Brent crude futures jumped 36 cents, or 0.4%, to USD85.14 a bbl, after rising 1.6% on Tuesday.
Tightening global oil inventories have supported strong crude prices during the past several mos, and the latest data from the American Petroleum Institute reinforced the view that supply remains constrained.
According to market sources, API data showed US crude stocks declined by 2.5 MM bbl for the week to Nov. 5, defying analysts' estimates for a 2.1 MM build in crude stocks in a Reuters poll.
Further underpinning the view the market remains tight, trading giant Vitol Group's CEO Russell Hardy said on Tuesday that oil demand had returned to pre-pandemic levels and that the first quarter of 2022 could see demand exceed 2019 levels.
"The possibility of a spike to USD100 per bbl is clearly there," Hardy told the Reuters Commodities Summit.
Market gains on Tuesday were mainly driven by a short-term outlook from the EIA, which projected gasoline prices would fall over the next few mos.
As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.
We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.
We also remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.