Both oil benchmarks rallied for two days in a row. The front-month WTI crude contract has obviously outperformed, accumulating gains of 6.7% over the past two days. The Brent contract added +3.8% during the period. WTI’s rally was driven by the sharp decline in US oil inventory.

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks fell -4.56 mmb to 1203.6 mmb in the week ended June 22. Crude oil inventory slumped -9.89 mmb (consensus: -2.57 mmb) to 416.64 mmb, as inventories decreased in 3 out of 5 PADDs. PADD III saw inventory draw of -5.17 mmb Cushing stock slipped -2.71 mmb to 29.89 mmb. Utilization rate added +0.8% to 97.5%. Meanwhile, crude production steadied at 10.9M bpd for the week.

Refined oil product inventories increased further. Gasoline inventory added +1.16 mmb to 241.2 mmb although demand jumped +4.34% to 9.73M bpd. The market had anticipated a +1.31 mmb increase in stockpile. Production added +0.43% to 10.14M bpd while imports soared +16.24% to 0.99M bpd during the week.

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Distillate inventory increased +0.02 mmb to 117.42 mmb. The market had anticipated a +0.77 mmb gain. This came in as a result of a -5.57% decline in demand to 3.61M bpd.  Production slipped -1.32% to 5.4M bpd while imports rose +10.2% to 0.05M bpd during the week.

Released after market close on Tuesday, the industry- sponsored API estimated that crude oil inventory dropped -9.23 mmb during the week. For refined oil products, gasoline stockpile rose +1.15 mmb while distillate added +1.79 mmb.

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