Crude oil prices moved lower today after the Energy Information Administration reported an inventory increase of 2.7 million barrels for the week to April 12.
This compared with a significant build of 5.8 million barrels for the previous week and an estimated 4-million-barrel build for the week to April 12 as reported by the American Petroleum Institute on Tuesday.
At the same time, the EIA reported declines in gasoline and middle distillates, which at the time of writing had not changed the direction of oil prices.
In gasoline, the authority estimated an inventory draw of 1.2 million barrels for the week to April 12, which compared with a modest build of 700,000 barrels for the previous week.
Gasoline production during the reporting period averaged 9.4 million barrels daily. This amounted to a slight decline from the previous week.
In middle distillates, the authority estimated an inventory decline of 2.8 million barrels for the week to April 12. This compared with a build of 1.7 million barrels for the previous week.
Middle distillate production for the period averaged 4.6 million barrels in the week to April 12, which was almost unchanged on the previous week.
Oil prices, meanwhile, extended their decline that started earlier this week, driven by apparent expectations that the risk of a serious supply disruption as a result of military escalation in the Middle East is rather limited. API’s inventory build estimate also helped pressure prices.
"For now, the near-term weakness in oil prices may reflect some expectations that tensions may still be contained and that other key oil producer such as Saudi Arabia may jump in to mitigate any global supply shock," IG analyst Yeap Jun Rong told Reuters earlier today.
“Our base case is one where tensions remain contained, avoiding a wider conflict that disrupts oil supply,” Standard Chartered analyst Han Zhong Liang told Bloomberg, suggesting that the risk of escalation appears to be limited for the time being, helping keep prices lower.
At the time of writing, Brent crude was trading at $89.10 per barrel and West Texas Intermediate was changing hands for $84.55 per barrel, both down from opening.
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By Irina Slav for Oilprice.com
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