This morning's release of the weekly oil inventories from the Energy Information Administration (EIA) showed that crude stockpiles decreased by 3.8 mln barrels compared to expectations for an increase of 500 thousand. Even though the draw-down was much larger than expected, the price of oil as well as energy stocks are struggling today. One reason for the weakness is that current levels of oil inventories are still 13 million barrels above their long-term average for this time of year. So just to get back to average by the end of the year, we would need to see a weekly decline of more than 4 million barrels. Given that there are only six other weeks this year where inventories declined by more than four million barrels, it seems unlikely that we will see this for the next four weeks.
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