The American Petroleum Institute (API) reported a mammoth build of 1.25 million barrels of United States crude oil inventories for the week ending September 14, compared to analyst expectations that this week would see a draw in crude oil inventories of 2.741 million barrels.
Last week, the American Petroleum Institute (API) reported a hefty draw of 8.636 million barrels of crude oil.
The API reported a draw in gasoline inventories for week ending September 14 in the amount of 1.485 million barrels. Analysts predicted a small draw of 104,000 barrels in gasoline inventories for the week.
Oil prices were trading up in afternoon trade prior to the release of the API data on inventories. At 1:56pm EDT, WTI was trading up 0.80% (+$0.55) at $69.54 per barrel—almost $1.00 above last week’s prices. Brent crude was also trading up, by 0.79% (+$0.62) at $78.71—up slightly from last week’s figures.
Tuesday’s rising prices are largely a reflection of persistent supply deficits in Iran and Venezuela and the market’s opinion that Saudi Arabia’s newfound love for $80 Brent will translate into KSA’s reluctance to make up for any real or imagined supply deficits.
In fact, S&P Platts cited JODI data today that showed The Kingdom saw in July its highest crude oil inventory drawdown in eight months.
US crude oil production as estimated by the Energy Information Administration was down slightly for week ending September 7 at 10.9 million bpd.
Distillate inventories were up this week—by 1.536 million barrels, compared to an expected build of 651,000 barrels. Inventories at the Cushing, Oklahoma, site decreased this week by 1.57 million barrels.
The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30 a.m. EDT.
By 4:40pm EDT, WTI was trading up at $69.54 and Brent was trading up at $78.71.
By Julianne Geiger for Oilprice.com