Crude oil prices fell today, even after the U.S. Energy Information Administration reported inventories of oil had shed 3.7 million barrels over the week to November 18.
Amid the latest slump in oil prices triggered by expectations of sluggish demand growth in China prompted by another flare-up of Covid, the EIA said that at 431.7 million barrels, U.S. crude oil inventories were 5 percent below the five-year seasonal average.
At the time of writing, Brent crude was trading at $85.10 a barrel, down by more than 3.5 percent and West Texas Intermediate was down by close to 4 percent, at $77.87 a barrel as bearish factors weighed prices down.
In fuels, the picture was different, with both gasoline and diesel stocks rising.
In gasoline, the EIA estimated an inventory build of 3.1 million barrels in the week to November 18, which compared with a build of 2.2 million barrels estimated for the previous week.
Gasoline production averaged 9.2 million barrels daily last week, which compared with 9.8 million barrels daily for the previous week.
In middle distillates, the EIA reported an inventory increase of 1.7 million barrels, with production averaging 5.1 million barrels daily.
This compared with an inventory build of 1.1 million barrels for the previous week and a production rate of 5.1 million bpd.
Oil prices had steadied earlier this week, as fears about the effect China’s latest Covid flare-up would have on demand was largely offset by concern about oil supply ahead of the EU embargo on Russian crude. The embargo also includes punitive measures for third parties buying Russian oil unless they are buying it at a capped price set by the EU and G7.
Today, however, fears about Chinese demand ignited another decline in prices.
Meanwhile, the diesel shortage looming over the global economy is creeping nearer, with prices up by 50 percent on the U.S. spot market since the start of the year but higher across the world, too. In the United States alone, the impact of the diesel shortage could reach $100 billion, according to a Rice University researcher.