The American Petroleum Institute (API) reported yet another crude oil inventory build this week, this time of 5.69 million barrels for the week ending October 26. The build was the fourth in as many weeks as reported by the API. The report was largely in line with analyst expectations that this week would see another substantial build in crude oil inventories of 4.110 million barrels.
The string of builds weighed heavily on prices, which were already depressed after IEA warned on Tuesday that the longer trend of higher oil prices would start to dent demand in key oil consuming markets such as India and Indonesia.
According to API data, the six-week running tally of crude oil inventory gains equals 27 million barrels.
The API reported a draw in gasoline inventories as well for week ending October 26 in the amount of 3.5 million barrels. Analysts had predicted a draw of 2.137 million barrels for the week.
Oil prices were down in afternoon trading prior to the release of the API data on inventories as traders feared additional inventory increases.
US crude oil production as estimated by the Energy Information Administration showed no change in production for the week ending October 19 at 10.9 million bpd—300,000 bpd off the highest ever US production of 11.2 million bpd reached just weeks ago.
Distillate inventories were down this week by 3.1 million barrels, compared to a smaller expected draw of 1.369 million bpd.
The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EDT.
The draw in gasoline and distillate inventories this week is unlikely to take the sting out of such high crude oil and Cushing inventories, and by 4:40pm EDT, WTI was trading down at $66.19 and Brent was trading down at $76.04.