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The American Petroleum Institute (API) reported a draw of 2.72 million barrels in United States crude oil inventories, compared to analyst expectations that the EIA would report a 2.0-million barrel draw for the week ending June 16. This week’s inventory draw almost completely offsets last week’s API-reported crude inventory build of 2.75 million barrels.
Oil prices started off the week with a rather poor showing, only worsening on Tuesday. As so often is the case, prices rallied on Tuesday—if you are inclined to call it a rally—from a low point of $42.94 to an unimpressive $43.49 by 3:44pm EST, still 2.14% down on the day. The falling prices, which are now at a seven-month low, are a clear indication that even record compliance from OPEC/non-OPEC is an insufficient bolsterer of prices. Both benchmarks are trading more than $3.00 lower than last week.
This week’s build, according to the API, brings the total inventory build in 2017 to 14.11 million barrels.
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Gasoline inventories rose this week by 346,000 barrels, as refiners continue to take crude oil out of inventory and turn it into gasoline. Surveyed analysts were close on gasoline predictions this week, expecting a 400,000-barrel build for the fuel, but even though the API report was close to projections, the three-week rise in inventories mean that demand for the fuel is not sufficient to cut into inventories as one would expect this time of year.
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Distillate inventories rose this week by 1.837 million barrels, compared to the draw las week of 1.451 million barrels. Inventories at the Cushing, Oklahoma, site fell by 1.269 million barrels, which is on top of last week’s dip of 833,000 barrels.
By 4:38pm EST, WTI was trading at $43.51, with Brent Crude trading at $46.00.
The U.S. Energy Information Administration report on oil inventories is due this week on Wednesday at 10:30 a.m. EDT.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.