WTI oil held steady at $76 per barrel, after the U.S. Energy Information Administration reported an inventory build of 19 million barrels for the first week of the new year.
At 439.6 million barrels, inventories of crude have turned about 1 percent above the average for this time of the year.
The report follows a moderate build of 1.7 million barrels for the last week of 2022, as reported by the EIA, and another, even smaller build of 700,000 barrels for the week before that.
A day before the EIA’s report came out, the American Petroleum Institute estimated that crude oil inventories in the U.S. had added an impressive 14.87 million barrels in the first week of 2023.
In fuels, the EIA estimated a build in gasoline stocks and a draw in middle distillates.
Gasoline stocks added 4.1 million barrels in the first week of 2023, according to the EIA, with production averaging 8.5 million bpd.
This compared with a modest draw of 300,000 barrels for the last week of 2022 and production of 8.5 million bpd on average.
In middle distillates, the EIA estimated an inventory decline of 1.1 million barrels for the first week of January, and a production rate of 4.5 million barrels daily.
These figures compared with an inventory draw of 1.4 million barrels for the previous week and a production rate of 4 million bpd.
Prices, meanwhile, remain in the realm of uncertainty and heightened volatility as questions remain about China’s post-lockdown recovery and the effectiveness of Westerns sanctions on Russian oil.
Yesterday, the surprise build in U.S. inventories pushed prices lower, helped by now chronic uncertainty about the global economy’s immediate prospects. Before that, however, prices were climbing up on expectations of a fast Chinese recovery, as Beijing issued higher fuel export quotas for local refiners.
At the time of writing, Brent crude was trading at $81.40 per barrel and West Texas Intermediate was changing hands at $76.26 per barrel.
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By Irina Slav for Oilprice.com
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The global oil market recognizes that China’s return to the global oil market is a far bullish factor than the addition of 19 million barrels to US oil inventory and that is why oil prices disregarded the US build.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert