Crude oil prices rose further today after the Energy Information Administration reported an oil inventory draw of 6.1 million barrels for the week to December 25.

A day earlier, the American Petroleum Institute also helped boost prices by estimating a crude oil inventory decline of 4.785 million barrels for the same week.

Last week, the EIA had estimated a modest inventory decline, to the tune of 600,000 barrels, which nevertheless helped prices continue higher as it coincided with positive vaccine updates that traders linked to an anticipated demand improvement next year.

Even news that vaccination in the United States is going much slower than expected, with just over a million people vaccinated as of December 23, compared with a planned 20 million for the month of December, did not affect oil’s rally. This was probably because Congress last week finally agreed on a pandemic stimulus bill that many expect will boost both consumer spending and oil demand.

EIA’s report is now likely to intensify this rally. The authority also reported a gasoline inventory draw of 1.2 million barrels for the last full week of December, which compared with a 1.1-million-barrel decline a week earlier. Gasoline production averaged 9.2 million bpd last week, compared with 8.8 million bpd a week earlier.

In distillate fuels, the EIA reported an inventory increase of 3.1 million barrels for the week to December 25, with production averaging 4.6 million bpd. This compared with an inventory decline of 2.3 million barrels for the prior week, and production averaging 4.6 million bpd.

Refineries processed 14.3 million bpd of crude oil last week, compared with 14 million bpd a week earlier, operating at 79.4 percent of their capacity, compared with 78 percent for the previous week.

The report suggests that despite recent sizeable inventory draws, there is still a way to go before demand for oil and fuels improves more strongly. There was also worrying news from the OPEC+ camp this week: Deputy Prime Minister Alexander Novak said Russia will argue for a further production increase at the January meeting of the extended cartel as prices were within optimal range at the moment.

This article is reproduced at Oilprice.com