Crude oil prices moved lower today, after the U.S. Energy Information Administration reported a sizeable inventory build of 8.7 million barrels for the week to November 17.
This compared with an inventory build of 3.6 million barrels for the week to November 10.
It also compared with an estimated inventory build of a substantial 9 million barrels, reported by the American Petroleum Institute for the week to November 17.
In fuels, the EIA estimated inventory mixed inventory changes for the latest week.
Gasoline stocks added 700,000 barrels in the seven days to November 17, the EIA said, with production averaging 9.4 million barrels daily.
This compared with an inventory draw of 1.5 million barrels for the previous week, when production of gasoline averaged 9.4 million barrels daily.
In middle distillates, the EIA estimated an inventory draw of 1 million barrels for the week to November 17. Production averaged 4.9 million bpd.
This compared with an inventory draw of 1.4 million barrels for the previous week, when production stood at an average 4.8 million barrels daily.
The API report on Tuesday pushed oil prices lower and they remained depressed as market players awaited the OPEC+ meeting this weekend.
"Going into the long weekend the market would rather be a little bit long than short," Andrew Lipow from Lipow Oil Associates told Reuters.
According to Dennis Kessler, senior VP for trading at BOK Financial Securities, the inventory build reported by the API and the contango in West Texas Intermediate will “keep a lid on prices”, Bloomberg reported.
“But it’s mostly a choppy trade until we see what OPEC+ is going to do,” Kessler told Bloomberg.
OPEC+ is meeting on Sunday to discuss market control measures and some observers expect further production cuts amid weaker benchmark prices. Meanwhile, the International Energy Agency said this week it expected an oversupplied oil market in 2024 even if OPEC+ extended its current cuts.
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Right now, however, “Global oil stocks are at low levels, which means that you risk increased volatility if there are surprises on either the demand side or the supply side,” Toril Bosoni, head of the IEA’s oil markets and industry division, told Reuters.
By Irina Slav for Oilprice.com
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