Oil prices are continuing the rally they began at the end of last week. Brent climbed to more than $66 per barrel yesterday, while WTI peaked at just shy of $62 per barrel. The price rise was boosted by sharp falls in crude oil and gasoline stocks in the US.



The inventory data released by the US Department of Energy confirmed the API's figures from the day before, showing a massive 6.8 million barrel crude oil inventory reduction, notes Commerzbank. This was due mainly to a nearly record-high rate of crude oil processing by refineries and a pronounced decrease in imports.



Despite the high level of refinery activity, gasoline stocks declined by almost 3 million barrels because US gasoline demand nearly reached the extremely high level again that it had seen at the end of May. By contrast, US crude oil production continued to grow, achieving more than 9.6 million barrels per day for the first time in 43 years.



According to the US Energy Information Administration (EIA), it should now have peaked. In the monthly report (STEO) it published on Tuesday, the EIA predicted that US crude oil production would begin falling in June and that it would decrease to 9.2 million barrels per day by next spring. Nonetheless, the EIA's production estimate is thus higher than before because the production level of the previous months was revised significantly upwards.



Non-OPEC supply is therefore set to grow by 500,000 barrels per day more than previously anticipated this year, added Commerzbank. This does not provide any justification for further rising oil prices. OPEC left its demand and supply estimates unchanged. The IEA will be publishing its forecasts later this morning.