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The American Petroleum Institute’s (API) weekly inventory data released on Tuesday at 4:35 pm (ET) shows an inventory build of 1.265 million barrels, which is more than was expected.
The build this week is up from -1.070 million barrels the week before. Analysts were overall expecting a build of only around 0.500 million barrels last week, so this news will affect trading tomorrow.
The data showed a build at Cushing of 382,000 barrels, and a distillate draw of 2.6 million barrels. The gasoline draw is recorded at 1.17 million barrels.
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Analysts are expecting tomorrow morning’s Energy Information Administration (EIA) report to show that crude oil stockpiles rose by 1.5 million barrels in the week ended 29 April.
Crude oil prices continued to drop Tuesday after news of an OPEC production increase and reports of stagnating Chinese demand for the month of April.
Light, sweet crude for June delivery dropped to $43.35 a barrel in New York. WTI had managed to hit over $46 last week, but the optimism has been short-lived and was largely founded on speculation rather than fundamentals.
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On the Intercontinental Exchange (ICE), Brent crude for July delivery ranged between $44.63 and $46.41 a barrel, closing at $45.02, down 0.81 or 1.78%. North Sea Brent futures also dropped.
The EIA last week said that U.S. production for the week prior had fallen significantly by 15,000 barrels per day to 8.938 million bpd—a new 18-month low—so all eyes will be on tomorrow’s EIA inventory report.
Overall for the rest of this year, the International Energy Agency (IEA) expects non-OPEC production to fall by 700,000 bpd.
By Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com