Oil Inventories Fall by More Than Expected 5.6M Barrels Last Week: API

By Yasin Ebrahim

Investing.com -- U.S. crude inventory fell by more than expected last week, the API reported Tuesday, at a time when many are mulling the prospect of production cuts from major oil producers.

West Texas Intermediate, the U.S. benchmark, traded at $93.75 a barrel following the report after settling up 3.7% at $93.74 a barrel. 

U.S. crude inventories fell by 5.63 million barrels for the week ended Aug. 19. That compared with a draw of 448,000 barrels reported by the API for the previous week. Economists were expecting a decline of about 3.2 million barrels. 

The API data also showed that gasoline inventories rose by 268,000 barrels last week, and distillate stocks increased by 1.05 million barrels.

The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 933,000 barrels last week.

Oil prices rallied on Wednesday after Saudi Energy Minister bin Salman touted the prospect of production cuts by major oil producers to boost prices.

The remarks from the Saudi Energy Minister bin Salman possibly signal that the Kingdom is preparing for the prospect of the U.S. agreeing to a “renewal of the nuclear agreement with Iran, thereby allowing the latter to return to the oil market,” Commerzbank said in a note.