A day after the American Petroleum Instituted shook oil prices lower by reporting a crude oil inventory build of close to 10 million barrels, the Energy Information Administration confirmed a build but a lower one, spurring a further price drop in WTI.
Crude oil inventories in the United States added 6.3 million barrels in the week to October 19, the EIA said, after a build of 6.5 million barrels a week earlier. At 422.8 million barrels, the EIA said, U.S. inventories of crude are some 2 percent above the seasonal average.
Gasoline inventories were down by 4.8 million barrels last week, while distillate inventories dipped by 2.3 million barrels.
Be that as it may, the EIA's report is bound to affect prices amid ever-higher volatility, after yesterday West Texas Intermediate ended trading with a loss of 4.2 percent, the largest in three months, CNBC reported. The loss was prompted as much by a stock market decline as by assurances from Riyadh Saudi Arabia will be able to make up for any lost oil supply from Iran. The stock market fall, however, may well continue in the coming days as investors heed warnings from various economic research authorities about a slowdown in global economic growth. Related: Russia's Oil Output Won't Go Much Higher
In its report, the EIA also said refineries processed 16.3 million barrels of crude daily last week and churned out 10 million bpd of gasoline and 5 million bpd of distillate fuel. This compares with the same processing rate of 16.3 million bpd for the week prior, which showed gasoline production of 10.4 million bpd, with distillate production at 4.8 million bpd.
The weekly fuel production and inventory figures from EIA will doubtless also be in the focus of traders' attention as they try to construct a reliable picture of supply in a key market such as the United States. At the same time, updates from Washington regarding Iran will probably trump these domestic figures in favor of global supply concerns.
The latest in this respect was a statement by Treasury Secretary Steven Mnuchin that unlike last time when the U.S. imposed sanctions on Iran, importers of Iranian crude will need to reduce their intake by more than 20 percent to have a chance at scoring a waiver with the department.
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