According to the American Petroleum Institute (API), there have been declines in the US oil inventory, particularly in the crude oil and gasoline supplies.
The API reported that there was an 884,000-barrel decline in the country’s crude supplies, while it was 893,000 barrels for gasoline and 4.3 million barrels for distillates, for the week ended February 17. Analysts even expect a further reduction in gasoline stockpiles of 1.2 million barrels and in distillates of 400,000 barrels.
Now, experts are looking into a number of factors that are driving this trend, such as the compliance of Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing nations to cut output in order to revive oil prices.
Based on this, analysts at S&P Global Platts came up with a hypothesis. They said:
“A rebound in U.S. shale production could also replace barrels missing from OPEC suppliers. After a two-year downturn, shale-watchers have expressed astonishment at the pace of activity just a handful of weeks into 2017.”
However, other experts have a different view about this trend in oil inventory in the US. One of them is the president of Lipow Oil Associates, Andy Lipow, who said:
“The market is still trying to determine which is going to win out. Is it going to be OPEC and non-OPEC production cuts actually resulting in substantial inventory draws or are we going to see increases in gasoline [and other crude stocks]?”
Nevertheless, oil prices did increase after the report. For example, crude oil increased to $53.90 a barrel in electronic trading from $53.59.