Crude Oil Prices Rally

Oil prices were rallying on Wednesday afternoon after government data showed a surprise drop in US inventories of the hydrocarbon commodity, marking the seventh week in 19 in which stockpiles have contracted. West Texas Intermediate (WTI) crude oil, the main US benchmark, was trading 1.2% higher at $49.24 per barrel recently, while Brent crude, the international gauge, was 1.4% higher at $52.36 per barrel.

US inventories of crude oil declined by 1.8 million barrels to 520.8 million barrels in the week ended May 12, according to the Energy Information Administration’s (EIA) weekly oil report, published on Wednesday. This compared to a 5.2 million barrel weekly decline registered the previous week and a 882,000 barrel increase which had been projected by the American Petroleum Institute (API) on Tuesday.

Total motor gasoline inventories fell by 0.4 million barrels, having contracted by 0.2 million barrels a week earlier. Distillate fuel inventories fell by 1.9 million barrels compared to a drop of 1.6 million barrels in the prior week, and propane/propylene inventories increased by 0.6 million barrels, having risen by 2 million barrels a week earlier. And commercial petroleum inventories increased by 4.3 million barrels having fallen by 3.6 million barrels a week earlier.

By Bryan Smith