In the week ending June 28, US crude oil inventories saw a significant drawdown of 12.157 million barrels, according to data from the Energy Information Administration (EIA). This decline was larger than the expected draw of 0.680 million barrels and marked a decrease from the previous week's inventory build of 3.6 million barrels.
The EIA also reported decreases in gasoline stocks, which shed 2.214 million barrels, and distillate stocks, which declined by 1.535 million barrels.
Crude imports into the US averaged 6.5 million barrels per day during this period, a decrease of 65,000 barrels per day compared to the previous week.
The inventory draw and decreases in gasoline and distillate stocks contributed to an increase in crude oil prices, which moved higher to $83.21 after the report.
Geopolitical factors also played a role in price movements, as concerns about a potential escalation of violence between Israel and Hezbollah in the Middle East caused worries about disruptions to Iran's oil supply and related infrastructure.
Despite these positive signs for the oil market, some analysts remain cautious. For example, Vivek Dhar of Commonwealth Bank of Australia noted that an escalation of violence between Israel and Hezbollah could put at risk Iran's oil supply and related infrastructure.
In addition to geopolitical risks, there are also concerns about the slowdown in US oil production growth. The latest oil export data has revealed that Saudi Arabia accounted for half of a global oil export decline that amounted to 1 million barrels daily last month.
Overall, the EIA's inventory data and other market developments suggest that crude oil prices may continue to trend higher in the coming weeks. However, there are also risks related to geopolitical instability and potential disruptions to supply that could impact prices.
