After yet another surprise report—this time of an inventory build—from the American Petroleum Institute weighed on prices yesterday, the Energy Information Administration confirmed a build, reporting U.S. crude oil inventories had added 3.8 million barrels last week.
At 408.7 million barrels, the EIA said, crude oil inventories were below the five-year seasonal average.
Analysts polled by IG Group had expected a slight inventory decline of 200,000 barrels, after the previous week’s major, 6.1-million-barrel draw reported by the EIA.
In gasoline, the EIA reported a draw in inventories, at 2.5 million barrels, compared with 2.3 million barrels a week earlier. Gasoline production averaged 10.5 million bpd between July 23 and 27, up slightly on the previous week.
In distillates, the agency reported an inventory increase of 3 million barrels. This compares with a draw of 100,000 barrels a week earlier. Refineries produced 5.2 million barrels of distillates daily last week, basically unchanged from a week earlier.
The average daily throughput of refineries stood at 17.5 million barrels of crude, almost 200,000 bpd more than in the previous week, with the facilities operating at 96.1 percent of capacity.
Production of crude oil is expected to stay at record highs for the time being despite pipeline constraints in the Permian—the top performer in the U.S. oil patch. Related: An Unexpected Windfall For U.S. Solar
Prices, meanwhile, remain volatile. OPEC’s production, according to a Reuters poll, inched up by just 70,000 bpd last month despite assurances that the cartel would be able to quickly ramp up production to make up for any loss of supply from Iran. This pulled oil prices higher this week.
On the other hand, another poll suggested the United States and OPEC together would be able to offset the decline in supply and satisfy growing demand in Asia. Prices, according to this poll, will average US$67.32 per barrel for WTI this year, and US$72.87 per barrel for Brent crude.
By Irina Slav for Oilprice.com
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