US crude oil stocks decreased by 0.9 MMBbl last week. Gasoline and distillate inventories increased by 2.1 MMBbl and 5.0 MMBbl respectively. Yesterday afternoon, API had reported a crude oil withdrawal of 0.72 MMBbl, whereas analysts had expected a small build of 0.58 MMBbl/d. The most important number to keep an eye on, total petroleum inventories, posted an increase of 0.5 MMBbl. For a summary of the crude oil and petroleum product stock movements, see table below.

US production was estimated to be up 9 MBbl/d from last week per EIA’s estimate. Imports were down 0.03 MMBbl/d last week to an average of 7.5 MMBbl/d. Refinery inputs averaged 16.3 MMBbl/d (114 MBbl/d less than last week), leading to a utilization rate of 89.8%. The petroleum stocks report has bullish and bearish elements this week. The crude oil withdrawal is bullish, as it runs contrary to the analyst expectations of a build. However, the large builds in gasoline and distillate inventories are bearish, especially given that refinery utilization remains below 90%. Prices are trading on the news that OPEC has agreed to a production cut and very little attention is being paid to the storage report. Prompt month WTI prices are up $3.25/Bbl today, trading at $48.48/Bbl at the time of writing.

See Drillinginfo’s EIA Charts.

Crude oil prices jumped this morning on news that OPEC has agreed to reduce output by 1.2 MMBbl/d. OPEC is expected to provide more details later today regarding the mechanics of the cut. If successfully implemented, the oversupply could be fixed as soon as 1Q2017. The market had largely expected an agreement to be announced, as without one the integrity o...