The Energy Information Administration reported a crude oil inventory build of 5.4 million barrels for the week to May 10. This follows a 4-million-barrel draw a week earlier.
Analysts expected an inventory increase of about 3 million barrels for the week to May 10, while the American Petroleum Institute estimated inventories had risen by 8.6 million barrels.
In gasoline, the EIA reported a draw of 1.1 million barrels, versus a decline of 600,000 bpd a week earlier, with production at 9.9 million bpd. This compares with 10.1 million bpd in average daily production for the first week of May.
In distillate fuel, the authority estimated an inventory rise of 100,000 barrels for the week ending May 10, compared with a draw of 200,000 barrels a week earlier. Distillate fuel production last week averaged 5.3 million bpd, up from 5.1 million bpd a week earlier.
Oil prices have been relatively stable these past few days as tailwinds and headwinds collide, keeping prices very much in one place.
On the one hand, there is the growing tension in the Middle East following the reported sabotage on four vessels at the Emirati port of Fujairah, which early U.S. assessment said may be the result of Iranian action in the Persian Gulf. Then Saudi Arabia reported a drone attack on oil facilities, which only intensified the pressure that would have normally pushed prices quite a bit higher.
However, this time there is the stable headwind of U.S. production and inventories. Yesterday’s API report served as the stabilizing force to keep prices relatively unchanged. U.S. production has been supported by the latest round of oil supply and demand forecasts that don’t expect global demand growth to be particularly lively this year.
To add to the downward pressure, Venezuela’s oil production surprisingly stabilized and even rose slightly last month, according to the latest Monthly Oil Market Report by OPEC released yesterday.
At the time of writing, Brent crude was trading at US$71.15 a barrel, with West Texas Intermediate at US$61.35 a barrel, both down slightly from opening.
By Irina Slav for Oilprice.com
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