The Energy Information Administration reported a surprise major build in crude oil inventories of 5.8 million barrels for the week to July 13, after a huge draw of 12.6 million reported for the previous week that represented the largest draw since 2016.
Analysts had forecast a decline of 1.9 million in crude oil inventories, and a day earlier the American Petroleum Institute reported a smaller surprise crude oil build of 629,000 barrels.
The EIA also said that gasoline inventories had shed 3.2 million barrels in the week to July 13, after a 700,000-barrel decline a week earlier. Gasoline production averaged 10.3 million bpd last week, with refineries processing 17.2 million bpd of crude.
Distillate inventories were down by 400,000 barrels, versus a 4.1-million-barrel build a week before. Production averaged 5.2 million bpd, compared with 5.4 million bpd in the previous week.
Oil prices have fallen drastically in the most recent week, after steadily climbing for the several weeks prior as the United States pressured oil buyers—particularly India--to stop buying Iranian crude completely. Oil prices began to waiver as the United States backed off its pressure, suggesting that it might be willing to offer waivers to certain countries that would allow them to continue to purchase Iranian crude oil even after sanctions take effect in November.
Related: U.S. Poised To Ease Biofuel Quotas
The trade war between the United States and China and Libya’s unrest that has resulted in a force majeure have also been complicating the market, along with US oil production, which has held steady at 10.9 million bpd for the week ending July 06 and the previous five weeks, after being on a tear for most of the 2018.
At 10:27am EDT, both benchmarks were trading down, with WTI trading down 0.77% at $66.64, while Brent crude was trading down 0.86% at $71.54.
By Julianne Geiger for Oilprice.com
More Top Reads From Oilprice.com:
- Do Trump’s Tweets Point To Another Oil Crisis?
- Chinese Refiner Stops U.S. Oil Imports, Turns To Iranian Crude
- The Critical Chokepoint That Could Send Oil To $250