The government has reported surprisingly large drops in U.S. crude oil inventories in six of the last seven weeks, but some analysts say they may not last.
The amount of crude oil in storage usually swells at this time of year as refineries scale back operations to perform maintenance. But the opposite has happened during the last two months. In all but one instance, weekly data have either showed a bigger-than-expected drop in stockpiles or confounded forecasts for a rise.
During that period, U.S. commercial crude inventory has plummeted by 26.5 million barrels, Reuters reported, citing analysts at JCB.
The pace of stockpile declines is critical because inventories remain near all-time highs amid a persistent supply glut in global crude oil. A draw down to more normal levels will play a crucial role in balancing the physical oil market and restoring some stability to the energy sector and related industries, which have been rocked by a two-year oil price downturn.