8 Million-Barrel Drop In Crude Oil Inventories Over Last Week - Oil Drum

[hatrack]

Big surprises all around this week:

Summary of Weekly Petroleum Data for the Week Ending November 30, 2007

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) dropped by 8.0 million barrels compared to the previous week. At 305.2 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories increased by 4.0 million barrels last week, and are below the lower end of the average range. Both finished gasoline inventories and gasoline blending components inventories increased during this period. Distillate fuel inventories increased by 1.4 million barrels, but are in the middle of the average range for this time of year. propane/propylene inventories decreased by 0.5 million barrels last week. Total commercial petroleum inventories decreased by 3.8 million barrels last week, and are in the upper middle of the average range for this time of year.

U.S. crude oil imports averaged nearly 9.4 million barrels per day last week, down 980,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 10.0 million barrels per day, or 121 thousand barrels per day more than averaged over the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged nearly 1.2 million barrels per day. Distillate fuel imports averaged 299,000 barrels per day last week.

I don't recall ever seeing a crude inventory drop that large. If I had a little more time today, I would check the history, but that drop should certainly rank up there among the biggest. (Note: I did go back and check, and there was a drop of just over 8 million barrels in the 2nd week of December last year). Interestingly, the markets aren't reacting much to this drop, or to the news from OPEC suggesting that they won't increase output. The inventory news is offset a bit by the fact that there was a gain at Cushing, but you would think this combination of news would put oil back up over $90. The price briefly popped up above $90, but as I write this, oil has dropped back to $88.72. A month ago, it seemed like every bit of news drove prices higher, but it now looks like we are operating in a different environment.

-----------------------

What a volatile week it's been. In last week's TWIP, with oil trading in the mid-$90's, I wrote that I expected it to drop back into the $80's soon. Following last week's inventory report, WTI did take a dive, but then a pipeline explosion in Minnesota - in which two people were killed - drove prices right back over $95. But the price could not be sustained, and signs of increasing supplies and softening demand, coupled with the possibility that OPEC would bump up production at their December 5th meeting, resulted in a drop into the $80's by the end of the week. This was the steepest weekly decline in more than two years.

EDIT

http://www.theoildrum.com/node/3328#more