The American Petroleum Institute (API) estimated on Tuesday another build in crude oil inventories, this time of 1.749 million barrels for the week ending June 19.
Analysts had predicted a smaller inventory build of 299,000 barrels.
In the previous week, the API shocked the market with an increase in crude oil inventories of 3.857 million barrels, after analysts had predicted a smaller build.
WTI was trading down on Tuesday afternoon prior to the API’s data release after some confusion about whether the trade deal between the United States and China was dead or whether it was still on.
Oil production in the United States has now fallen from 13.1 million bpd on March 13 to 10.5 million bpd for June 12, according to the Energy Information Administration—a drop of 2.6 million bpd.
It is the lowest production level in years, and yet inventories keep rising as demand remains at low levels given the pandemic and the resulting lockdown.
At 3:43 pm EDT on Tuesday the WTI benchmark was trading down on the day by $0.48 (-1.18%) at $40.25. The price of a Brent barrel was trading down on Tuesday as well, by $0.57 (-1.32%), at $42.51—both benchmarks are trading up on the week.
The API also reported a draw of 3.856 million barrels of gasoline for week ending June 19—compared to last week’s 4.267-barrel build. This week’s large draw compares to analyst expectations for a 1.304-million-barrel draw for the week.
Distillate inventories were down by 2.605-million barrels for the week, compared to last week’s 919,000-barrel build, while Cushing inventories saw a draw of 325,000 barrels.