Oil Prices Continue To Rally As EIA Confirms Crude Inventory Draw

Crude oil prices moved higher today after the U.S. Energy Information Administration reported a crude oil inventory draw of 3.4 million barrels for the week to March 25.

This compared with a decline of 2.5 million barrels the EIA had estimated for the previous week, and another draw of 3 million barrels, estimated by the American Petroleum Institute for the week to March 25.

In gasoline, the EIA reported a modest build in inventories, at 800,000 barrels. Gasoline production averaged 9.1 million bpd last week.

This compared with an inventory draw of 2.9 million barrels for the previous week, with average daily production at 9.8 million barrels daily.

In middle distillates, the EIA estimated an inventory increase of 1.4 million barrels for the week to March 25, with production averaging 5.1 million bpd.

This compared with a middle distillate inventory draw of 2.1 million barrels for the previous week and average daily production of 5 million bpd.

Despite the increase in fuel production, prices at the pump remain too high for comfort, which this week prompted the House Energy and Commerce Committee to summon the CEOs of half a dozen large oil producers to a hearing titled “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.”

The lineup includes the CEOs of Chevron, Devon Energy Corp, Exxon, and Pioneer Natural Resources. Also among those summoned was the head of Shell’s U.S. operations and the chairman of BP America, Reuters reported.

Some Democratic legislators have blamed the oil industry for high oil prices and the resulting high fuel prices while the industry has countered with explanations that the oil market is a global market and price-setting is not within the powers of a single country.

Speaking of price-setting, OPEC is meeting tomorrow to discuss its production policy, with surprises little likely. The cartel and its partners in OPEC+ are adding 400,000 bpd to their monthly production, with some members falling short of the target because of technical difficulties.