Prices slump despite falling crude oil inventories

Two days ago, the US Energy Information Administration reported that crude oil inventories fell by 2.8 million barrels over the week. Nevertheless, oil prices tumbled.

Earlier, the American Petroleum Institute announced that crude oil inventories had dropped by 3.8 million barrels for the week after reporting the biggest increase in oil stocks since February. It stood at 5.6 million barrels.

The EIA also reported an increase in fuel.According to the EIA, gasoline stocks rose by 2.6 million barrels in the week. This was great news for the US motorists.Gasoline production averaged 9.5m barrels last week, up from the previous week for which the EIA has yet to provide data. The EIA estimated the week's middle distillate inventory had rose by 2.6 million barrels. It was noted that this was about 20% lower than the five-year average for this time of year.Middle distillate production averaged 5.1m barrels a day last week, down from a week earlier, according to the EIA. Fuel supplies in the US remain lower than usual despite record high prices. Because of this, Biden announced last week a four-point plan to cut retail prices.The plan submitted to Congress proposes a three-month suspension of the federal fuel tax and calls on states to suspend state fuel taxes. Earlier this month, the president also urged the oil industry to use its profits to increase refining capacity and retail petrol station owners to pass on the price of electricity to consumers.