Us EIA crude oil inventory plunges by more than 6 million barrels WTI crude oil jumps by more than 3 per cent in a day

The US Energy Information Administration ((EIA)) said on Wednesday that commercial crude oil stocks excluding strategic reserves fell by 6.422 million barrels to 417.4 million barrels, the lowest since the week of September 13, 2019, or 1.5 per cent.

Crude stocks along the Gulf Coast fell to their lowest level since January 2020, while those in the Midwest fell to their lowest level since October 2018, according to the EIA report. Imports of commercial crude oil last week were 5.761 million b / d, down 49000 b / d from the previous week, while exports increased by 282000 b / d to 2.624 million b / d.

Zero hedge analysts on the financial blog commented that EIA's official data confirmed the huge demand for crude oil, gasoline and fractions, as well as Cushing storage facilities. U. S. crude oil production has slowly recovered from production disruptions caused by Hurricane Ida. On average, more than 1.5 million barrels a day of oil production was halted last week, according to (BSEE), the U. S. Safety and Environmental Enforcement Agency.

Due to the impact of Hurricane Ida and a report this week from the International Energy Agency, OPEC and its allies increased production, but global oil supplies should not increase until October, and international oil prices continued to rise after API and EIA reported an across-the-board reduction in oil inventories.

Us WTI crude surged on Wednesday to its highest level since early August and is now trading at $72.66 a barrel, up 3.1 per cent on the day. Brent crude rose 2.53% to $75.46 a barrel.

(American WTI crude oil 4 hours chart source: Tradingview)

"the impact of the hurricane is much greater than many expected, and production in the region may be difficult to recover in the near future," said Edward Moya, a senior analyst at OANDA.

The US Gulf of Mexico shut down 29.52 per cent of crude oil production (or 537100 barrels per day) and 39.4 per cent of natural gas production (or 870.70 million cubic feet per day), BSEE said. Energy correspondent Javier Blas pointed out that the Gulf of Mexico region has reduced production by about 27.3 million barrels since Aug. 27.

"there is not enough new crude oil supply to enter the market, so the market feels very nervous," said Matt Sallee, a strategist at Tortoise. This made crude oil prices continue to rise, and demand concerns put novel coronavirus's worries on the back burner. "

OPEC analysts expect global oil demand to increase by 4.15 million barrels a day in 2022 compared with this year's expectations, up 860000 barrels from their forecast a month ago.

Sallee added, "Offshore gas production has also returned to a slow pace since the hurricane. This has led many power companies to buy oil products to generate electricity, which has also become another driving force for the rise in crude oil prices. "