The Energy Information Administration reported a crude oil inventory build of 4.6 million barrels for the week to April 24, after a 9-million-barrel build the previous week.
This compared with a build of 8.44 million barrels, reported by the American Petroleum Institute a day earlier and analyst expectations of a build of 8.125 million barrels.
In gasoline, the EIA reported an inventory draw of 3.2 million barrels for the week to April 24, after last week it surprised the market with a draw of 3.7 million barrels, sparking hopes that demand could be returning.
Gasoline production fell slightly last week, to 6.7 million bpd.
In distillate fuels, the authority reported a hefty inventory rise of 9.5 million barrels for last week, versus an increase of 5.1 million barrels for the prior week. Distillate fuel production averaged 5.1 million bpd last week, compared with 5 million bpd a week earlier.
Oil prices rose sharply yesterday on a series of news about well shut-ins across the U.S. shale patch accompanied about reports about lockdown easing in many states. However, following the release of API’s inventory estimate prices and a bleak job loss report, prices again started to slide, with West Texas Intermediate trading at $23.39 a barrel at the time of writing. Brent crude was trading at $29.63 a barrel.
Meanwhile, Morgan Stanley analysts said in a note the worst for oil may well be over, with demand expected to begin improving, and with it, prices. The recovery, however, will take time as countries relax their lockdowns cautiously, meaning slowly.
This slow rate of improvement in oil consumption will continue to weigh on prices and on oil companies’ performance over the rest of the year and possibly even into 2021, as economic forecasters seem unanimous in their expectations it would take at least a year for the global economy to return to pre-crisis growth levels.
By Irina Slav for Oilprice.com
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