Crude oil prices jumped Wednesday after the Energy Information Administration reported a massive, unexpected drop in U.S. inventories, Kallanish Energy reports.

U.S. West Texas Intermediate crude futures settled up 2.7%, at $59.38 per barrel. Brent crude futures rose 2.1%, to $66.42/Bbl. 

The Energy Information Administration said Wednesday U.S. crude stockpiles fell an unexpected 12.8 million barrels last week. Crude hit its session high after the data was released. (See story elsewhere in this issue.)

“Whatever we’re not using here, we’re just exporting,” Andy Lipow, of Lipow Oil Associates, told CNBC. “As our production increases, there will be more available for the world market. World oil demand continues to grow. We’re supplying that increased demand as well as some of the shortfall (from Iran and Venezuela).”

U.S. crude oil exports set record 

(Source: Energy Information Administration)

Crude exports reached a record 3.77 million barrels per day (Mmbpd), while imports fell to 800,000 Bpd. “It’s due to a significant decline in imports at the same time we exported a record amount of crude oil on the Gulf Coast,” said Lipow.

Oil also got a boost amid tensions between Iran and the U.S. President Trump signed an executive order Monday imposing new sanctions on Iran in response to the downing of an unmanned U.S. drone last week.

In addition to rising tensions with Iran, last week the East Coast’s largest refinery, Philadelphia Energy Solutions complex in Philadelphia, had a series of explosions and subsequent fire that shut down the facility.

“The regional prices, the consumer in the Philadelphia and New York markets are going to see pretty significant increases in price until the new supply shows up in the next few weeks. They’ll see increases of over 10 cents a gallon,” Lipow told CNBC.

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