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The Energy Information Administration (EIA), the statistical arm of the US Energy Department, today released its weekly petroleum status report, which showed a substantial drop in crude oil inventories.
This included a fall in supplies at Cushing, Oklahoma (the price settlement point for US crude oil futures), which would normally be viewed as fundamentally bullish. A number of factors, however, have worked in the opposite direction, pushing the price of crude down sharply for a second straight day.
By mid-afternoon in New York crude oil futures for February were trading down 1.42% at $94.12 a barrel.
Alongside the data showing a decline in the US stockpile of crude, the EIA also reported a large increase in inventories of both distillate fuel, which rose 5.04 million barrels last week, and gasoline, which rose 844,000 barrels.
While crude inventories fell 7.0 million barrels, it was the build in the refined products that held the most sway in the market, with the possibility that the fall in crude stocks may have been affected by year-end jiggery-pokery at refineries to avoid taxes that are levied on the amount of oil held in storage at the close of the year. The EIA also reported that fuel demand plummeted 7.2%, the largest fall seen in two years.