Crude oil prices rebounded on Wednesday morning after the Energy Information Administration reported a crude oil inventory draw of 9.4 million barrels for the week to August 30.

This compares with an inventory decline of 4.7 million barrels reported for the previous week, and a 6.36-million-barrel draw reported by the American Petroleum Institute yesterday. Analysts had expected a relatively modest inventory draw of 1.95 million barrels for the week to August 30.

At 498.4 million barrels, inventories remain above the five-year average for this time of the year as demand recovery stalls.

The EA also reported an inventory draw of 4.3 million barrels in gasoline and a 1.7-million-barrel decline in distillate fuel inventories for the last week of August. This compares with a gasoline inventory draw of 4.6 million bpd for the previous week and a build of 1.4 million barrels in distillate fuels.

Gasoline production last week averaged 9.5 million bpd, slightly up on the previous week. Distillate fuel production last week averaged 4.8 million bpd last week, down on the average of 5.1 million bpd in the previous week.

Refineries last week processed 13.9 million bpd of crude oil, compared with 14.7 million bpd during the previous week. Hurricane Laura had a big part to play in last week’s processing rates as some refineries had to close temporarily.

Oil prices have been trending higher since the start of the week on a string of bullish news, including strong economic data from China, a weaker U.S. dollar that made oil cheaper for buyers in foreign currencies, and reports of more economic stimulus discussions in key markets. All this fueled hopes of faster oil demand recovery, elevating prices.

At the time of writing, Brent crude was trading at $45.29 a barrel, with West Texas Intermediate at $42.31 a barrel, both down from the opening of trade today.

By Irina Slav for Oilprice.com

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