Breaking News:

Exxon Completes $60B Acquisition of Pioneer

U.S. Shale Oil Production Growth Is Slowing Down

Suriname’s Resource Boom is Back on Track With First Oil Targeted for 2028

  1. Home
  2. Energy
  3. Crude Oil

Oil Prices Recover After Small Crude Inventory Build

By Irina Slav - Feb 14, 2018, 9:45 AM CST

After reporting two consecutive weekly crude oil inventory builds, this week the EIA continued with another build, of 1.8 million barrels for the week to February 9.

Analysts cited by IG were spot on in their predictions: they had expected the EIA to report a 1.8-million barrel build, down slightly from last week's 1.9-million barrel increase that weighed on prices that were already on the slide. A day earlier, the American Petroleum Institute estimated a 3.947-million-barrel build in inventories, which pressured prices further.

After four gasoline inventory builds and one draw since the start of the year, for the week to February 9 the EIA reported the second build in a row, at a hefty 3.6 million barrels. Daily gasoline production averaged 9.6 million barrels, down from 10.1 million bpd a week earlier as maintenance season kicks in.

At the time of writing, Brent crude traded at US$62.33 a barrel and West Texas Intermediate was at US$58.65. Meanwhile, data from the physical oil market has suggested that the slide we are witnessing now may be only the beginning of a trend that would very likely worry OPEC, but could also trouble U.S. drillers, too.

Demand for some of the most popular crude oil grades has been weaker than expected and their prices have fallen to the lowest in several months. This is true of grades such as North Sea Forties, and Russian Urals-and in fuels, Atlantic diesel-as refineries seem to be reluctant to take advantage of lower prices and boost their profit margins.

This data goes counter to a string of optimistic global economic growth forecasts that should lead to higher crude oil demand and is making traders more cautious. The EIA itself and the International Energy Agency have added to this attitude by expecting U.S. production growth to continue, and according to the IEA, turn the U.S. into the world's top crude oil producer and force OPEC to face its dilemma of market share versus prices again.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Back to homepage


Loading ...

« Previous: Is History Repeating Itself In Oil Markets?

Next: Saudi Arabia Vows To Cut More Production To Stabilize Oil Market »

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More

Related posts

The Eagle Ford Is Turning Into A Natural Gas Haven

G7 Agrees To End Coal Use But Can It?

U.S. Oil, Gas Drillers See Continued Slowdown

Most Popular

Large Crude Inventory Build Rocks Oil Prices

Is Copper Heading to $15,000?

The Novel Material Revolutionizing Energy Storage

OPEC Chief Challenges Reports Predicting Demise of Oil Demand

U.S. Sees New Egyptian Gas Fields As Key To Its New Middle Eastern Strategy

Comments

  • John Brown - 14th Feb 2018 at 11:09am:
    So lets just look at the facts. Despite OPEC/Russia idling millions of BPD, and then entire industry and support industries with a direct interest in higher oil prices talking the price up despite a glut of oil still sloshing around, oil prices recovered slightly based on an inventory build? That of course doesn't make sense but then the manipulation of oil prices into the $60s and all the stories about oil going to $80 this year, despite the continuing glut, the millions of BPD of available capacity, full strategic reserves, and the USA on track now to hit 11 Million barrels a day by mid-year 2018, and 12 plus in 2019. Personally despite the facts I'm rooting for everyone to continue to manipulate oil so WTI remains in the $65 range. That will guarantee the U.S. oil industry stays in Gold Rush mode, and takes over more and more market share which will be good for the U.S. and the rest of the world. I can't even imagine what production will be like in the U.S. in 2 years if oil move into the $70 or $80 a barrel range. Maybe 15 Million BPD? I'll bet that U.S. producers are moving mountains to lower the cost of production so when the price drops back into the $50s and $40s they will still be highly profitable.
  • the masked avenger - 14th Feb 2018 at 11:41am:
    At current oil and gas prices, electric cars, soon to come trucks and continued alternative energy development will continue to accelerate. Good for the consumer and bad for big oil. Right on.
  • Hillary Ndimele - 15th Feb 2018 at 3:08am:
    Ultimately, oil will still stay at least within the $60 per barrel which is a good news to OPEC at least in the short to Medium time Horizon . That is not to say that oil prices might not go southwards given the dynamics in electric cars, Shale oil exploration . Oil outlook for the future remains bleak and that is just the truth ....