The American Petroleum Institute (API) estimated on Tuesday another large crude oil inventory build of 13.143 million barrels for the week ending April 10 as demand destruction stemming from the coronavirus wears on.
Today’s inventory build was expected to be smaller, 11.676 million barrels.
In the previous week, the API estimated a large build in crude oil inventories of 11.938 million barrels, while the EIA’s estimates painted an even scarier picture, reporting a build of 15.2 million barrels for the week.
For a bit of perspective regarding the challenges that this amount of oil buildup poses for the industry, the last few weeks of inventory builds in the United States, which total 35.566 million barrels using API data, is enough to fill more than 17 VLCCs.
Oil prices were trading sharply down on Tuesday afternoon prior to the API’s data release, as the market shrugged off the news of another OPEC production cut in light of the falling demand and a rather shocking economic forecast from the IMF.
At 4:18 pm EDT on Tuesday the WTI benchmark was trading down on the day by $1.81 (-8.08%) at $20.60—down roughly $4 per barrel week over week. The price of a Brent barrel was also trading down on Tuesday, by $1.75 (-5.15%), at $29.99—down by more than $2 week on week.
The API reported a build of 2.226 million barrels of gasoline for week ending April 10, after last week’s 9.445-million-barrel build. This week’s build compares to analyst expectations for a larger 6.386-million-barrel build for the week.
Distillate inventories were up by 5.640 million barrels for the week, compared to last week’s 177,000-barrel draw, while Cushing inventories saw a large gain of 5.361 million barrels.
US crude oil production as estimated by the Energy Information Administration showed that production for the week ending April 3 fell to 12.4 million bpd—down 600,000 bpd for the week.
At 4:35 pm EDT, WTI was trading at $20.78 while Brent was trading at $30.06.