Crude oil moved lower today after the Energy Information Administration reported an inventory build of 4.6 million barrels for the week to September 24.
This compared with a draw of 3.5 million barrels for the previous week and analyst expectations of a 2.33-million-barrel draw.
In fuels, the EIA reported more inventory builds, though modest ones.
Gasoline stocks added 200,000 barrels in the week to September 24, compared with a build of 3.5 million barrels for the previous week.
Gasoline production averaged 9.9 million bpd last week, which compared with 9.6 million bpd a week earlier.
In middle distillates, the EIA estimated an inventory build of 400,000 barrels for the week to September 24, with production at 4.6 million bpd.
This compared with an inventory draw of 2.6 million barrels for the previous week, with average production during that week at 4.5 million bpd.
A day earlier, the American Petroleum Institute reported an unexpected inventory build of 4.13 million barrels, which took some steam out of an oil price rally that pushed Brent crude over $80 a barrel—a three-year high—yesterday.
The rally was sparked by a gas and coal crunch that caused worry about energy supplies during the northern hemisphere winter when demand is at its highest. A continued disciplined approach to production by U.S. shale drillers and production outages caused by Hurricane Ida also contributed to the upward potential in oil.
“[The price] could go much higher if the weather is as cool this winter as some people predict,” Andrew Gillick from energy consultancy Enverus told the Financial Times.
For now, Brent slipped below $80 before the end of trade yesterday but only because traders decided to take profits on the latest bull run. Fundamentally, oil has higher to go as neither OPEC+, nor other producers can or want to ramp up production fast enough to avoid further price jumps.
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By Irina Slav for Oilprice.com
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