Investing.com - U.S. oil stockpiles fell more than expected last week, according to government data out Wednesday, but oil prices found direction hard to come by after OPEC cut its demand forecast.
The Energy Information Administration (EIA) said oil inventories fell by 6.9 million barrels for the week ended Sept. 6. Analysts were expecting a drawdown of about 2.7 million, according to forecasts compiled by Investing.com.
Oil futures jumped just after the report, but quickly reversed course. WTI futures was flat at $57.40 at 11:08 AM ET (15:08 GMT), while Brent futures rose 0.45% to $62.66
“The U.S. crude draw is going and going even as fall approaches,” Investing.com analyst Barani Krishnan said. “This is almost similar to last year when we had a stretch of draws late into the summer. There’s no certainty yet how long this will last.”
Gasoline inventories slipped by 0.68 million barrels, compared with expectations for a drop of about 0.85 million. Distillate stockpiles rose 2.7 million barrels, compared with forecasts for a slight rise of 0.07 million.
In a monthly report, OPEC said oil demand worldwide would expand by 1.08 million barrels per day in 2020, 60,000 bpd less than previously estimated, and indicated the market would be in surplus.
“(W)ith OPEC slashing its demand outlook again and John Bolton’s ouster (as National Security Advisor) raising the possibility of an Iranian deal that could bring an additional 1 million bpd to the market, the oil bulls are going to need all the positive numbers they can get,” Krishnan said.
OPEC, in the report, lowered its forecast for world economic growth in 2020 to 3.1% from 3.2% and said next year’s increase in oil demand would be outpaced by “strong growth” in supply from rival producers such as the United States.
U.S. crude production remained at 12.4 million barrels last week, the same as the week before, the EIA said.
“The (EIA) numbers look good across the board,” Krishnan added. “Imports are down again, Cushing stockpiles are down by 800,000, production is steady at just under the record high at 12.4 million bpd and exports are up nearly quarter million bpd and staying nicely above the 3 million bpd mark.”
“The gasoline came in just under expectations. The only disappointment is in distillates, where we have a build of nearly 3 million bpd versus the flat forecast.”
-- Reuters contributed to this report.