A day after the American Petroleum Institute once again took markets by surprise by reporting a crude oil inventory build of 7.29 million barrels, the Energy Information Administration said inventories were indeed up, by 7.1 million barrels for the week to March 1.
At 452.9 million barrels, the EIA said, crude oil inventories were about 4 percent above the seasonal average.
The authority also reported refinery runs of 16 million barrels daily for last week, versus 15.9 million bpd a week earlier. Gasoline production stood at 9.9 million bpd, up from 9.6 million bpd a week earlier. Distillate fuel production averaged 4.9 million bpd last week, compared with 4.8 million bpd a week earlier.
Gasoline inventories shed 4.2 million barrels in the week to March 1, versus a 1.9-million-barrel decline during the week before. Distillate fuel inventories were down 2.4 million barrels, from a 300,000-barrel decline a week earlier.
The API inventory estimate pressured prices considerably, not least because it was combined with announcements from Exxon and Chevron they had big plans for the Permian, with both eyeing production increases to about 1 million barrels daily over the next five years.
These plans and the continuous rise in U.S. production are successfully playing counterweight to the effect of OPEC's production cuts on prices despite incidental factors that pull prices in one or the other direction on a daily basis such as any news updates from Venezuela or the announcement the Libya's Sharara field, which can produce 320,000 bpd, was back in operation.
Another topic that swings prices is, of course, the ongoing trade negotiations between Washington and Beijing. Observers for the trading world tend to oscillate between hope and gloom here, but the latest updates seem to suggest a trade deal may indeed happen and put an end to the conflict that's hurt a number of industries.
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
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