Crude oil prices fell further today after the Energy Information Administration reported an inventory build of 3.1 million barrels for the week to September 27.
Analysts had expected a relatively modest build, of 1.57 million barrels, after a week earlier the EIA reported a build of 2.4 million barrels. The agency’s latest report extends two weeks of consecutive inventory builds.
The EIA also reported a 200,000-barrel decline in gasoline inventories for the week to September 27, which compares with a 500,000-barrel rise in the previous week.
In distillate fuels, the authority estimated a 2.4-million-barrel inventory fall, which compares with a draw of 3 million barrels for the previous week.
Refineries processed 16 million bpd of crude last week, the EIA also said, and churned out 10.1 million bpd of gasoline and 4.8 million bpd of distillate fuels. A week before, gasoline production averaged 10.2 million bpd and distillate fuel production averaged 5 million bpd.
At the time of writing Brent crude traded at $58.50 a barrel and West Texas Intermediate was at $53.44, despite an upbeat inventory estimate from the American Petroleum Institute, which yesterday said U.S. crude oil inventories had shed 5.92 million barrels in the week to September 27.
This was not enough for a sustainable rally, however, not only because everyone waits for the official figures from the EIA, but also because of external factors. One of these was an announcement from Aramco that Saudi oil production was now back to normal levels following the attacks on a field and a processing facility two weeks ago. Another was the deepening worry about demand for the commodity.
This worry got a boost this week from the latest U.S. manufacturing activity data, which turned out to be at its lowest in more than 10 years. Ecuador’s announcement that it would part ways with OPEC beginning next January didn’t help either, sparking more fear about excessive supply.
Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More