U.S. crude oil inventories plunge and prices jump as climate moves away from calls to end fossil fuel funding

U.S. crude oil inventories plunged last week as a rebound in refining was not matched by a rebound in mining, which remains paralyzed due to pressure on banks and investors to they cut off fossil fuel companies’ access to credit and capital.

Crude oil inventories fell 3.4 million barrels to 410 million barrels, according to data released Wednesday by the Energy Information Administration. That was a bigger drop than the 2.5 million drop predicted by analysts polled by Econoday.

West Texas Intermediate crude futures rose 3.47% after the news at $107.91. Brent crude, the global benchmark, rose 3.36% to $113.93.

The American left has campaigned for years to cut the supply of oil, gas and coal, including cutting domestic production by tightening financial terms, raising the price of leases or reducing leases on federal lands. , raising taxes on fossil fuel companies and thwarting the Keystone pipeline. These are called “restrictive supply-side” policies.

On Wednesday, a coalition of climate change alarmist groups released a report castigating continued financial support for fossil fuel companies. “Any bank backing a company that develops fossil fuels is causing climate chaos,” the report asserts.

NEW YORK, NY – OCTOBER 14: Environmental activists demonstrate outside Chase Bank, calling on banks to divest from fossil fuels and invest in renewable energy on October 14, 2015 in New York City. While the protest was billed as an environmental protest, activists also protested against racial discrimination, housing issues, controversial techniques used in the financial industry and the prison industrial complex. (Photo by Andrew Burton/Getty Images)

The report shows that the campaign against finance was likely effective in reducing the credit available for fossil fuels. Funding from the four largest U.S. banks – Bank of America, Citigroup, Wells Fargo and JP Morgan Chase – fell from $210 billion in 2019 to $179 billion in 2021, a decline of 14.8%. Lower global oil demand for much of the past year, due to economies still reeling under the weight of the pandemic, also likely contributed to the drop in funding.

“In 2022, every bank must make halting fossil fuel expansion an explicit precondition for any financial support, while beginning to phase out funding for the sector altogether,” demands the alarmist climate change report.

Climate activists take part in a protest as part of the Global Climate Strike, to call for action against climate change in New York on March 25, 2022. (Photo by Kena Betancur / AFP) (Photo by KENA BETANCUR /AFP via Getty Images)

Oil inventories in Cushing, Oklahoma fell 1 million barrels from the previous week to 24.2 million barrels, according to the EIA. Cushing is the delivery location for the benchmark NYMEX light sweet crude oil futures contract. A network of nearly two dozen pipelines and 15 storage terminals, Cushing has a storage capacity of 90 million barrels, which represents 13% of total oil storage in the United States.

A pipeline sign reads “Cushing Okla – Pipeline Crossroad of the World” on May 4, 2020 in Cushing, Oklahoma. – (Photo by Johannes EISELE/AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

U.S. crude oil production rose 100,000 barrels per day from the previous week to 11.7 million barrels per day, according to the EIA.

Gasoline inventories rose sharply, unexpectedly climbing by 785,000 barrels to 238.8 million barrels. Analysts had predicted a decline in gasoline inventories.

Distillate inventories, which include fuel oil and diesel fuel, also unexpectedly increased. These increased by 1.4 million barrels to reach 113.5 million barrels. Despite construction, these are now 16% below the five-year average.

Capacity utilization at US refineries jumped 1 percentage point from the previous week to 92.1%. Analysts had expected a slight drop in usage.

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