Oil Prices Steady Despite Surprise Crude Build

Crude oil prices saw a tiny dip after the Energy Information Administration reported an inventory build of 600,000 barrels for the week to April 16.

This compared with a decline in inventories of 5.9 million barrels for the previous week and analyst expectations for a draw of 2.86 million barrels.

A day earlier, the American Petroleum Institute reported a modest inventory build of less than half a million barrels.

In gasoline, the EIA estimated an inventory increase of 100,000 barrels for the week to April 16, versus a build of 300,000 barrels for the previous week. Gasoline production averaged 9.4 million bpd, versus 9.6 million bpd a week earlier.

In middle distillates, the authority reported an estimated inventory decline of 1.1 million barrels, versus a draw of 2.1 million barrels for the previous week. Middle distillate production averaged 4.6 million bpd last week, slightly down on a week earlier.

Brent crude traded at $65.85 a barrel at the time of writing, with West Texas Intermediate at $61.86 a barrel both down by m ore than a percent as demand fears began to weigh on fresh optimism, fueled by two recent reports, from OPEC and the International Energy Agency, both of which revised upwards their oil demand forecasts for the year.

Also, Libya’s National Oil Corporation declared force majeure on exports from the port of Hariga due to lack of maintenance funds, and production was shut down at several fields, bringing the country’s total to less than 1 million bpd.

The fears that stopped the rally were driven by the fast increase in new Covid-19 infections in India—one of the biggest drivers of global oil demand, after the United States and China.

"Unless major progress is seen beyond the key industrialized nations such as the U.S., the pandemic factor could require some downward adjustments in global oil demand expectations for this year," Reuters quoted Ritterbusch and Associates analyst Jim Ritterbusch as saying.

By Irina Slav for Oilprice.com

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