EIA’s Inventory Report May Halt Oil’s Post-Election Rally

A few hours after Donald Trump won the presidential election, the Energy Information Administration (EIA) reported a build of 2.4 million barrels of crude in U.S. commercial inventories. Total inventories reached 485 million barrels in the week to November 4.

Last week, the EIA shook markets by saying inventories had risen by 14.4 million barrels - the highest in over three decades. However, that build lost a lot of its significance after ClipperData noted that much of it came thanks to a correction in the reporting of import data.

Yesterday, the American Petroleum Institute reported an increase of 4.4 million barrels in crude oil inventories, higher than analyst expectations. The estimate, however, did not do much damage to crude oil prices, which inched down temporarily but later recovered.

In the seven days to November 4, the EIA said, refineries processed 15.8 million barrels of crude daily, producing 10.5 million barrels of gasoline and 4.8 million barrels of distillate, both up on the previous week.

Gasoline inventories last week fell by 2.8 million barrels. The API had predicted s 3.6-million-barrel draw.

After the Republican win of the presidential vote, benchmark oil prices quickly recovered the losses registered on voting day, and even started climbing up.

However, volatility remains high, especially in light of the latest remarks by OPEC's secretary-general Mohammed Barkindo, who yesterday said that if the organization does not reach a production cut deal at the end of this month, international oil markets will face further instability.

At the time of writing, WTI was trading at US$44.77 a barrel, down 0.47 percent, and Brent, the international benchmark was at US$45.88, down 0.35 percent.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Could Trump's Victory Render OPEC's Output Deal Irrelevant?
• $30 Oil Or Worse If OPEC Fails
• OPEC Just Knocked $20 Off Its Oil Price Outlook