The Energy Information Administration reported a build of 8.2 million barrels in commercial crude oil stockpiles for the week to March 2, a day after the American Petroleum Institute surprised analysts with a massive 11.6-million-barrel increase.
Some observers, however, recall that the first sale from the U.S. strategic crude oil reserve, announced a couple of months ago, was scheduled to take place last week. The sale was of 10 million barrels.
The EIA reported that total crude oil stockpiles stood at 528.4 million barrels at the end of last week, again exceeding the upper seasonal limit. In the previous week, the EIA estimated crude oil inventories at 600,000 barrels higher than a week before.
Refineries processed an average of 15.5 million barrels of crude per day in the period, producing 9.8 million barrels of gasoline per day, compared with 9.4 million barrels per day in the previous week. Inventories of the fuel went down substantially, however, by 6.6 million barrels, versus a decline of 2.6 million barrels in the previous week.
Earlier this week, the authority projected U.S. crude oil production to reach 9.7 million barrels by next year – a new historic high that is bound to weigh on prices if no counter-trends present themselves.
Meanwhile, OPEC and other major producers are meeting in Houston at this year’s CERAWeek conference, and signals coming from it are likely to deepen the uncertainty about international oil prices.
Saudi Arabia and Russia seem to be generally positive, with Saudi Arabia’s Oil Minister saying that the market fundamentals are already improving and his Russian counterpart Alexander Novak noting that it’s too premature to talk about a need for extending the production cut agreement.
Yet others, such as Iraq’s Jabar al-Luaibi are not as bullish, accepting the possibility that a need to extend the cut may arise. Iraq is still lagging behind other OPEC members in meeting its new production quota.
US crude is widely seen as the main headwind for international prices at the moment, and inventory figures, although dismissed by some as irrelevant, are still capable of swinging international markets.
By Irina Slav for Oilprice.com
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