The Energy Information Administration reported today a massive crude oil inventory build of 15.189 million barrels for the week to December 4, after a modest draw of 700,000 barrels estimated for the previous week.
This week's rise in crude inventories came close to the largest crude build ever, which was recorded earlier this year for the week ending April 10, when the EIA reported a 19.25 million barrel inventory build.
A day earlier, the American Petroleum Institute had reported a crude oil stock build of just of 1.1 million barrels along with much larger builds in gasoline and distillate fuels.
In fuels, the EIA reported an inventory build in gasoline and another build in distillate stocks for the week to December 4.
In gasoline, the authority estimated an inventory increase of 4.2 million barrels, compared with a sizeable build of 3.5 million barrels for the previous week. Gasoline production averaged 8.3 million bpd, compared with 8.6 million bpd a week earlier.
In distillate fuels, the EIA estimated an inventory build of 5.2 million barrels for the reporting period. This compared with an increase of 3.2 million barrels for the previous week. Production of middle distillates averaged 4.7 million bpd last week, compared with 4.6 million bpd a week earlier.
Oil prices have reversed their recent rally this week as worries about the continuing rise in Covid-19 infections globally began to displace enthusiasm from positive vaccine news from earlier this month. Even the start of vaccinations in the UK did not arrest the slide.
Optimism driven by OPEC+ finally reaching an agreement how to continue cutting production from January next year also helped pushed prices higher, even though the agreement was for a moderate increase in collective production.
"We are confident that the weak demand will soon move back into the market's focus," Eugen Weinberg, head of commodities research at Commerzbank, told Bloomberg on Tuesday. "The latest price rise has been driven by speculation."
At the time of writing, Brent crude was trading at $49.38 a barrel, with West Texas Intermediate changing hands for $46.05 a barrel, both up from opening.
By 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
Comments
Still, oil prices will resume their surge within 24 hours driven by sound global oil market fundamentals and the optimism pervading the market about the start of global anti-COVID vaccination and the opening of the global economy to business.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Tesla was unsurprisingly hammered today so sure they have an extra $5 billion US Dollars which they no doubt have already spent on construction projects but in the end they have to start "moving the metal" as they say in the car business and if gasoline prices in the USA suddenly collapse to ten cents a gallon I don't the sales of battery electric cars in the USA moving much higher than is the case right now...meaning best selling Sedan and small SUV yes but not for large SUVs or Pickup Trucks let alone commercial Class 8 semis which still have yet to hit the market as battery power despite literally billions upon billions spent in creating basically two trucks.
Talk about a money furnace!
Anyhow not long gold that's for sure but sure am glad so many others are. I have recommended selling our easy money gain in $slv silver etf as it pays no dividend and I think silver prices are about to plunge given the political chaos in the USA and Wars in Europe and East Asia breaking out in a spectacular way. Just a matter of time before Brazil invades Argentina in my opinion as well with same said be true of Columbia attacking Venezuela. King Dollar ain't nearly so worthless as anyone is claiming at the moment at all.