US stockpiles of commercial crude oil fell by about 400,000 barrels last week, which analysts said could reverse this week’s three-month low in oil prices.
Crude stocks at Oklahoma’s Cushing delivery hub fell by 961,000 barrels in the last week, the Energy Information Administration (EIA) said.
Crude inventories dropped by 405,000 barrels in the week to January 17 to 428 million barrels. Some analysts forecast a 1-million-barrel drop.
The international benchmark Brent crude fell 2.97 per cent lower to US$62.67 a barrel in New York this week, a decline of 4.2 per cent since the start of the year.
Crude oil prices have fallen this week amid fears of the coronavirus hurting oil and fuel demand.
The fall in commercial crude stocks and a drop in distillate fuel oil supplies, which is used to make diesel and heating oils, of 1.2 million barrels helped offset a rise in refined motor-fuel inventories of 1.7 million barrels, the US Energy Department said.
US petroleum stocks rose by 1.7 million barrels last week to 260 million barrels, the EIA reported, compared with market expectations of a 3.1-million-barrel rise.
Fatih Birol, executive director of the Paris-based International Energy Agency, forecast the market to be in surplus by 1 million barrels per day in the first half of this year. The American Petroleum Institute revealed a rise in US crude stocks of 1.6 million barrels last week, in contrast with the fall of 1 million that had been expected.
A possible coronavirus pandemic might hit global trade. Goldman Sachs said if the virus developed dramatically, demand for oil could decline by 260,000 barrels per day (bpd).
Falling oil prices contributed to oil and gas bankruptcies in the US and Canada that rose by 50 per cent last year than in 2018, according to Haynes and Boone. The Dallas-based legal firm reported that exploration and production company bankruptcies reached 42 in 2019, up from 28 in 2018.
ExxonMobil Fuels has reported the highest crude oil refinery capacity under maintenance in both planned and unplanned operations during 2019, according to GlobalData, an analytics company.
The operator had a total refining capacity of 2.7 million barrels per day under maintenance last year.
Adithya Rekha, an analyst at GlobalData, said: “ExxonMobil Fuels had four of its refineries – Baton Rouge, Baytown, Beaumont and Joliet – under maintenance in 2019. Baton Rouge and Baytown had both planned and unplanned maintenance, while Beaumont had unplanned maintenance, and Joliet had planned maintenance in 2019. All four refineries are in the US, and have refining capacities of 503,000 bpd, 561,000 bpd, 369,000 bpd and 236,000 bpd, respectively.”
ExxonMobil’s Baton Rouge operation. Picture credit: Wikimedia