Crude oil prices went down today, after the U.S. Energy Information Administration reported a crude oil inventory build of 1.1 million barrels for the week to September 16.
For the previous week, the EIA had estimated an inventory build of a considerable 8.8 million barrels. A day before this week's EIA report, the American Petroleum Institute estimated a crude oil stock build of just over 1 million barrels, with builds estimated in fuels as well.
The EIA reported a build of 1.6 million barrels for gasoline inventories, estimating production at some 9.5 million bpd last week. This compared with an inventory draw of 1.8 million barrels for the previous week, and a production rate of 9.5 million bpd.
In middle distillates, the EIA estimated an inventory increase of 1.2 million barrels for the week to September 16, which compared with a build of 4.2 million barrels for the previous week.
Middle distillate production averaged 5.2 million bpd last week, which compared with 5 million barrels daily for the previous week.
Prices have been sliding over the past two days as the market braces for another rate hike, due to be announced by the Federal Reserve later today.
"The market tone remained bearish due to concerns that the aggressive monetary tightening in the U.S. and Europe would boost the likelihood of a recession and a slump in fuel demand," a Fujitomi Securities analyst told Reuters.
"Since oil prices have been falling in the anticipation of the rate hikes, they may briefly rise after the announcements, but they will likely return to a downward trend again on fears over weakening demand," Toshitaka Tazawa also said.
Meanwhile, the chief executive of Aramco Amin Nasser warned that oil prices are about to start rising because of the looming shortage of the commodity, resulting from years of underinvestment.
At the time of writing, Brent crude was trading at $91.50 per barrel and West Texas Intermediate was changing hands at $84.55 per barrel.
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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