Supplies fell by 1.31 million barrels for week ended March 15, as indicated by data released by the Energy Information Administration, an arm of the U.S. Department of Energy. Imports of crude oil fell 219,000 barrels per day to amount to 7.27 million barrels per day.
The losses to inventories, which occurred for the first time in more than two months, are correlated with the West Coast slipping by almost 2.8 million barrels per day last week. But those sharp losses were tempered by an upward drive of nearly 2.4 million barrels from the Gulf Coast.
"The big draw on the West Coast offset the bullishness of the overall (crude draw) number. West Coast numbers aren't as important," research director Kyle Cooper with IAF advisors in Houston told the news source on Wednesday.
At 12:44 p.m. on Wednesday, West Texas Intermediate crude oil futures climbed 0.36 percent, a 20-cent lift to $92.46 per barrel. Brent crude oil futures climbed 0.34 percent, a 35-cent rise to $107.80 per barrel.
West Coast impacts inventory report
The 2.75 million barrel drop on the West Coast last week is the report's biggest fall, Bloomberg reports.
The drop comes after oil supplies changed in the region, which periodically are overlooked by investors and traders since the method of distributing from the are differs from the remainder of the U.S.
When not including supplies from the West Coast, inventories increased 1.44 million barrels.
"If you take out West Coast, inventories actually had a build," commodity fund manager Tariq Zahir with Tyche Capital Advisors in New York told the news source on Wednesday. "Over all, it's a mixed report. Demand is still pretty weak."
Euro debt crisis impacts crude oil futures
The price of crude oil also is impacted by troubles in the euro zone with Cyprus, whose leadership voted on Tuesday against Cyprus nationals having to pay a tax on bank deposits as a condition for disbursal of emergency bailout aid approved last weekend.
Finance ministers from the euro zone included that tax as a condition to implementing the bailout.
The euro zone, which accounted for roughly 16 percent of the globe's demand of oil in 2011, was believed to be emerging from the shadow of the sovereign debt crisis. The scourge attacked member nations' banks, markets and public finance systems for three-plus years.
But the situation with Cyprus has re-awakened concerns.
"Oil is going back and forth on the Cyprus situation," senior market analyst Phil Flynn with the Price Futures Group in Chicago told Bloomberg on Wednesday.
China eyes Afghanistan production
The Wall Street Journal reports the largest oil company in China is aiming to begin commercial production of crude oil in Afghanistan.
The China National Petroleum Corporation is forecast to see production from Northern Afghanistan wells climb to 25,000 barrels per day by the end of this year, Afghanistan Mine Minister Wahidullah Shahrani told the news source.
He noted that production has the likelihood of rising to 40,000 per day next year, noting the crude oil initially will be shipped with the assistance of trucks. It is projected to pass through a northern neighbor of Afghanistan as well, but he did not state whether that would be Turkmenistan, Uzbekistan or Tajikstan.
"The wells are ready for production," the minister told the news source. "If we complete negotiations with our northern neighbor in the next two to three weeks, then production of the crude will begin with an initial 5,000 barrels."
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