According to the Weekly Petroleum Status Report by the EIA, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) of the week ending January 5 decreased by 4.9 million barrels from the previous week.
USA oil prices rose $1.44 to $63.17 a barrel in NY on Tuesday, the highest level in three years, partly on expectations of further declines in the nation's oil stockpile. Analysts said that could have been the result of extreme cold temperatures across the United States.
Higher crude oil prices contributed to the increased gasoline prices in 2017. February West Texas Intermediate crude rose 61 cents, or 1%, to settle at $63.57 a barrel on the New York Mercantile Exchange. The highest prices were in September. The session high for the global benchmark was $69.37, highest since May 2015. Ken Medlock, director of an energy-studies program at Rice University in Houston, says an assessment Tuesday, Nov. 15, 2016, by the U.S. Geological Survey that the Wolfcamp Shale in the Midland region could yield 20 billion barrels of oil is another sign that "the revival of the Permian Basin is going to last a couple of decades".
Even with bigger-than-expected builds in gasoline and heating fuel stocks, crude oil kept its early gains.
Federal U.S. estimates show total crude oil production hit 9.78 million barrels per day in the week ending December 15, a record high that Craig said was out of reach because of the recent U.S. cold snap.
He warned, meanwhile, that oil prices above $60 per barrel could be a spoiler as US shale oil producers would take advantage of the rally by expanding their exploration and production work.
The report also noted that the North Sea Brent barrel stands at $64 per barrel, which is the highest it has been since November 2014, the start of the oil price crisis.