NEW YORK (AA) – Crude oil inventories in the U.S. saw the sharpest weekly decline in over 30 years, according to data released by the country’s Energy Information Administration (EIA) Thursday.
Stocks of crude oil fell by a massive 14.5 million barrels, or 2.8 percent, for the week ending Sept. 2, compared to the week before, the EIA reported. This is the largest weekly decline in crude inventories since April 1985.
The market expectation was the crude oil inventories to increase by 0.23 million barrels, while crude stocks rose 2.28 million barrels in the previous week.
Gasoline stocks were also down, by 4.2 million barrels, or 1.8 percent, during the same period. The market consensus was for the gasoline stocks to decline by 0.17 million barrels, while gasoline inventories fell by 0.69 million barrels the week before.
Another surprising element in the EIA’s weekly oil data was the sharp decline in U.S. oil imports, which fell by 1.85 million barrels per day (mbpd) for the week ending Sept. 2.
The substantial decline in crude oil, gasoline inventories and oil imports were seen as a result of Hurricane Hermine, which negatively impacted the U.S. Gulf Coast – a region known as the heart of American oil refineries.
“Hurricane Hermine … prevented ships docking in the Gulf of Mexico. As such we think that last week’s plunge in imports and stocks is likely to be a one-off,” said Thomas Pugh, a commodities economist at London-based Capital Economics.
After the sudden decline in inventories and imports, oil prices rose more than 3 percent later on Thursday.
The American benchmark West Texas Intermediate reached as high as $47.31 a barrel with a 3.9 percent jump, while international benchmark Brent crude soared 3.7 percent to as high as $49.80 per barrel, before 1630 GMT.
Pugh warned that crude oil stocks could rise sharply this week, “as those tankers which were prevented from unloading last week unload.”
“Stocks are likely to bounce back up next week,” he concluded.
