• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 8 minutes The Inconvenient Truth Of Electric Cars
  • 12 minutes The Plastics Problem
  • 3 hours SHALE MAGIC: Let the oil flow: US to lead oil output growth through 2030: ConocoPhillips chief economist
  • 3 hours Philadelphia Energy Solutions seeks to permanently shut oil refinery - sources
  • 8 hours IMO 2020
  • 1 hour Climate change & Wildfires: More Wildfires To The Western U.S., Will Affect Tens Of Millions Of People
  • 6 hours To be(lieve) or Not To be(lieve): U.S. Treasury Secretary Says U.S.-China Trade Deal Is 90% Done
  • 8 hours Ireland To Ban New Petrol And Diesel Vehicles From 2030
  • 10 hours EIA reports 12 mm bbls Inventory draw . . . . NO BIG DEAL . . . because U.S. EXPORTED RECORD 12 MILLION BARRELS DAY OF CRUDE + PETROLEUM PRODUCTS ! ! ! THAT'S HUGE !
  • 10 hours Its called reality: Economic, policy challenges to make Asia's energy transition painfully slow
  • 9 hours Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 6 hours On the hobby side of things
  • 23 mins Democrats Green Beauty Pageant
  • 9 hours Oil Demand Needs to Halve: Equinor
Irina Slav

Irina Slav

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

More Info

Premium Content

Oil Prices Spike On Lower Than Expected Inventory Build

Amid supply disruptions in Libya and strengthening expectations of an OPEC production cut extension, the Energy Information Administration reported commercial oil inventories in the U.S. had gone up by 900,000 barrels in the week to March 24.

Yesterday, the American Petroleum Institute estimated inventories had added 1.91 million barrels in the reporting period, largely in line with analyst expectations of a 2-million-barrel build.

The EIA also said that total commercial inventories stood at 534 million barrels, close to the seasonal upper limit. In the previous week, these stood at 533.1 million barrels.

Refineries processed an average of 16.2 million barrels daily, compared with 15.8 million bpd in the previous week, producing 10 million barrels of gasoline, up from 9.8 million barrels in the week to March 17. Inventories of the fuel went down by a hefty 3.7 million barrels, giving some cause for optimism.

The last four months have seen mostly builds in U.S. inventories, as reported on a weekly basis by both the EIA and the API, contributing substantially to the rise of bearish sentiment among investors and dampening hopes of further oil price strengthening.

However, the recent clashes between armed groups in Libya eventually led to a suspension of production at two fields, together producing 252,000 bpd – almost a third of the country’s 700,000-bpd production rate. The news sparked some optimism among traders, but that will be short-lived unless OPEC decides to extend its production cut agreement into the second half of the year. Related: OPEC Weighs Extension As Oil Markets Start To Lose Their Nerve

The chances of this happening are increasing, although Saudi Arabia has declared it will only sign up for it if global inventories continue to exceed the five-year average when the cartel meets next in late May.

Meanwhile, UAE’s Oil Minister Suhail Al-Mazrouei said that the current glut is a result of seasonal factors in the U.S.: it is refinery maintenance season and crude oil stockpiles are increasing. Once maintenance ends, inventories should start going down.

This wouldn’t explain how U.S. inventories kept on growing before maintenance season, however, so it’s more likely than not that Gulf producers are trying their best to arrest the price slide, and the situation in Libya is helping.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • NickSJ on March 29 2017 said:
    The headline of this article is "Oil Prices Spike...", yet in the entire article, the only mention of prices is in the last sentence "Gulf producers are trying their best to arrest the price slide".

    It would be nice if OilPrice.com headline writers actually read the articles.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News