The Energy Information Administration reported a crude oil inventory build of 3.7 million barrels for the week to February 15, versus an increase of 3.6 million barrels in the previous week, pushing prices lower.
Brent crude and West Texas Intermediate have been trending higher today as news reports strengthen hopes the OPEC cuts will do their job and boost prices. The latest here was a visit by a special Saudi Arabian envoy to Nigeria, which had been straying from the production cut path, instead increasing its crude oil production. After the visit, however, Nigeria’s president pledged a production cut.
New production data from the EIA failed to reverse the optimism: the authority forecast that shale oil production will hit a record 8.4 million bpd largely on the back of strong production growth in the Permian. Production in the Permian is set to rise above 4 million bpd for the first time in history next month, the Energy Information Administration said in the latest release of its Drilling Productivity Report.
Meanwhile, gasoline inventories in the world’s largest consumer of oil and oil products fell by 1.5 million barrels last week, versus a 400,000-barrel rise a week earlier. In distillate fuels, the EIA reported a 1.5-million-barrel decline as well, compared with a 1.2-million-barrel inventory rise a week earlier.
Refineries last week processed 15.7 million barrels of crude daily, compared with 15.8 million bpd a week earlier, producing 9.5 million bpd of gasoline and 4.8 million bpd of distillate fuels. A week before that, refineries in the U.S. churned out 9.6 million bpd of gasoline and 4.8 million bpd of distillate fuel.
At the time of writing Brent crude was trading at US$66.94 a barrel and West Texas Intermediate was changing hands for US$56.88 a barrel, slightly down from opening today and EIA’s figures are bound to cause something more than a lukewarm reaction in markets.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- How Sanctions Are Helping The U.S. Become A Net Oil Exporter
- Permian Production To Break 4 Million Bpd In March
- A Worrying Trend For International Oil Giants