The American Petroleum Institute (API) reported on Tuesday a bigger build than expected in crude oil inventories of 4.577 million barrels for the week ending October 23.
Analysts had predicted a much smaller inventory build of 1.11 million barrels.
In the previous week, the API reported a surprise build in oil inventories of 584,000 barrels, after analysts had predicted a draw of 240,000 barrels.
Oil prices were trading up on Tuesday afternoon before the API’s data release, despite the depressed demand outlook that persists in the market. Bearish factors this week include a ramp-up of oil production in OPEC producer Libya. Bullish factors include another storm in the U.S. Gulf Coast that is shutting down oil production. The increase in the number of new Covid-19 cases serves as a chronic bearish undertone in the market.
In the runup to Tuesday’s data release, at 12:07 pm EDT, WTI had risen by $0.95 (+2.46%) to $39.51, down roughly $1.60 per barrel on the week. The Brent crude benchmark had risen on the day by $0.81 at that time (+2.00%) to $41.27—down $1.50 on the week.
Oil production in the United States slid significantly last week, increasing the gap between this week and the all-time high this year to 3.2 million barrels per day. U.S. oil production currently sits at 9.9 million bpd, according to the Energy Information Administration.
The API reported a surprise build in gasoline inventories of 2.252-million barrels of gasoline for the week ending October 23—compared to the previous week’s 1.622-million-barrel draw. Analysts had expected a 2.0-million-barrel draw for the week.
Distillate inventories were down by 5.333 million barrels for the week, compared to last week’s 5.983-million-barrel draw, while Cushing inventories rose by 136,000 barrels.
At 4:36 pm EDT, the WTI benchmark was trading at $39.49 while Brent crude was trading at $41.18.