A day after the API reported a 5.04-million-barrel decline in commercial U.S. crude oil inventories, the Energy Information Administration crushed hopes of a prolonged price recovery by reporting a build of 2.3 million barrels for the week to January 13, to a total of 485.5 million barrels.
Last week, the EIA reported an increase of 4.1 million barrels in commercial crude oil inventories, versus analyst expectations of a 930,000-barrel build.
According to the EIA, in the week to January 13 refineries processed 16.5 million barrels of crude daily, down by 639,000 bpd on the week, producing 9 million barrels per day of gasoline, down on the previous week’s 9.7 million barrels daily.
Inventories of the fuel rose by 6 million barrels in the period, compared with a 5-million-barrel increase in the week to January 6. Yesterday, the API estimated that gasoline inventories had jumped by a hefty 9.75 million barrels.
Imports of crude oil for the week to January 13 stood at 8.4 million barrels daily, a palpable decline on the previous week’s 9.1 million bpd.
Earlier this week, in its Drilling Productivity Report, the EIA estimated that domestic output from the shale patch would be 41,000 bpd higher in February than in January, thanks mostly to a substantial production rise in the Permian, which will offset declines in other shale plays.
This growing local production could lead to further builds in inventories, so we may see more weekly reports like today’s and last week’s.
International oil prices are still on the seesaw, hovering around the US$50 mark but suffering from continuing doubts about the OPEC deal and the projections of higher shale output, which could partially offset the desired effect of the deal, if it is ever achieved.
At the time of writing, WTI was trading at US$51.74 a barrel, and Brent was at US$54.52 a barrel.
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By Irina Slav for Oilprice.com
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