The API was said to report USA crude stockpiles slid 1.05 million bbls last week, with storage also shrinking at tanks in the key hub of Cushing, Okla.
Prices felt the blow of these revised projections and will likely continue to feel it for a few more days. WTI (West Texas Intermediate) crude, which until then was trading at about $50 a barrel, surged about 20 percent in one month following the crisis. Inventories continue to decline globally as well with IEA suggesting that OECD commercial stocks declined by 17.9 million barrels in November, a drawdown that was twice the five-year average. During the first month of the year, the EIA reported a total draw of 6.1 million barrels, with three weeks of draws since January 1, and one week of a build.
For next year, oil demand is expected to rise by 350,000 bpd versus 340,000 bpd previously.
Distillate inventories increased by 3.9 million barrels last week and remained in the middle of the average range for this time of year. Earlier this week, the USA government forecast production rising above 11 million barrels a day this November, which would exceed top world producer Russia's current level.
But in one of the steepest rises of any oil producer in modern history, USA output has surged by more than 20 percent since mid-2016, undermining OPEC's and Russia's efforts to tighten the market and prop up prices by withholding production.
Net U.S. crude imports fell last week by 60,000 barrels per day. The FPS capacity is 575,000 barrels of oil per day.
U.S. oil inventories have declined by 41 million barrels over the last 10 weeks and are 15 per cent lower compared to the same period a year ago. In particular, the main USA stock indexes on February 6, rose by 1.8-2.3 percent. American Petroleum Institute data Tuesday showed an unexpected decrease in U.S. stockpiles, while on Wednesday U.S. equity futures fell and the dollar rose.
USA production has risen steadily in recent months and is expected to average 10.24 million bpd during the first quarter of this year.
John England, who serves as the head of consultancy for Deloitte's USA energy and resources practice, marveled at the progress witnessed under the Trump administration, as coal is being displaced at power plants with cleaner, more cost-effective shale natural gas.