- US oil inventories decline 2.7 million to 482.2 million barrels in the week ended May 15.
- Commercial inventories have declined for 3 consecutive weeks.
- WTI, Brent crude trade higher.
US commercial crude inventories declined for a third consecutive week last week, but remained very high by historical standards, suggesting oil prices could remain subdued for a while longer.
US commercial crude inventories declined by 2.7 million barrels to 482.2 million barrels in the week ended May 15, the Energy Information Administration (EIA) reported on Wednesday. The inventory decline was more than double the rate of forecasts.
Inventory levels remained at record highs compared to the same time of year in at least the last 80 years, the EIA said.
Commercial inventories increased at a relentless pace in the early part of the year, having climbed to new record highs for four consecutive months. Inventory levels finally dropped in the week ended May 1, but remain at record highs compared to year-ago levels. May 15 marked the third consecutive drop in inventory levels, suggesting demand was heating up ahead of the summer driving season.
Oil prices climbed on Wednesday, with US crude trading closer to $59 a barrel. The price of West Texas Intermediate (WTI) for July delivery increased 81 cents to $58.81 a barrel.
The price of Brent crude was up 90 cents to $64.92 a barrel.
Goldman Sachs recently issued a forecast for oil prices. While US crude is expected to average $52 a barrel this year as opposed to $48, the long-term supply/demand balance will likely keep oil prices subdued.
“We see global oil demand being met by US shale, which is continuing to benefit from efficiency and productivity improvements, and OPEC,” Goldman said in a report published over the weekend.
Last week the international investment bank also said that it expects the global oil surplus to reach 1.9 million barrels per day in the second quarter, up from a previous estimate of 1.3 million barrels per day.