Oil prices bolstered by falling crude inventories




Crude oil prices continued up on Wednesday after the Energy Information Administration (EIA) reported a crude oil inventory draw of 2.5 million barrels for the week to March 18.

This compared with a build of 4.3 million barrels for the previous week, which temporarily arrested the latest oil price rally.

In gasoline, the authority reported an inventory draw of 2.9 million barrels for the week to March 18, with production averaging 9.8 million barrels daily.
This compares with an inventory draw of 3.6 million barrels for the previous week and average daily production of 9.4 million barrels.

In middle distillates, the EIA reported an inventory decline of 2.1 million barrels for last week, which compared with a build of 300,000 barrels for the previous week.

Middle distillate production averaged 5 million bpd last week, which compared with 4.9 million bpd a week earlier.

Regarding middle distillates, top global commodity traders have warned that a shortage of diesel was looming over the global economy that could become systemic, according to a Financial Times report from this week.

“Europe imports about half of its diesel from Russia and about half of its diesel

from Russia and about half of its diesel from the Middle East,” Russell Hardy, chief executive of Vitol, said, as quoted by the FT. “That systemic shortfall of diesel is there.”

“Diesel is not just a European problem, this is a global problem. It really is,” said Gunvor co-founder Torbjorn Tornqvist.

Meanwhile, oil prices slowed down after shooting up earlier this week on news that the European Union was mulling over a ban on Russian oil. After it became clear that the ban has yet to be agreed as some EU members had misgivings about that step, the price rally stalled.

At the time of writing, Brent crude was trading at $120.90 per barrel, with West Texas Intermediate at $114.20 per barrel, both up slightly from Tuesday’s close.

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