At the end of last week, total domestic crude oil inventories rose less than expected – a build of only 1.3 million bbl to total 447.2 million bbl, according to new data from the Energy Information Administration (EIA). The slight build in crude inventories was supported by a sharp drop in demand for gasoline, which fell by approximately 500,000 b/d to 9.1 million b/d, according to EIA. With crude stockpiles growing less than anticipated, crude prices will likely continue to gain ground. For market observers, the price gains indicate that the global crude supply is tightening, an anticipated result of OPEC’s production reduction agreement of 1.2 million b/d with other non-OPEC producers, including Russia. The reduction remains in effect for the first six months of 2019. Additionally, the global crude supply is expected to tighten as a result of U.S.-imposed sanctions on crude exports from Venezuela, which could send prices higher. In the weeks ahead, rising crude prices will likely increase pump prices for motorists across the country since the price per barrel of crude comprises approximately 50 percent of the cost consumers pay at the pump.
Crude Inventories Rise Less Than Expected; Higher Oil and Pump Prices Likely Ahead