The Energy Information Administration reported a build in U.S. crude oil inventories of 3.3 million barrels for the week to April 6, double that of API’s estimate for a 1.76-million-barrel inventory increase, which weighed on prices yesterday.
Analysts polled by IG had expected the EIA to report a modest build of 250,000 barrels.
Last week’s build will add to a combined 2018 inventory increase of 22.5 million barrels as of end-March.
In fuels, the EIA reported gasoline inventories had gone up by 500,000 barrels in the reporting period, compared with a 1.1-million-barrel decline in the previous week. Gasoline inventories had been falling every week since the beginning of last month, with the cumulative drop in inventories for the period February 26 to March 30 at more than 12 million barrels.
Distillate inventories shed 1 million barrels, compared with a 500,000-barrel increase a week earlier.
Gasoline production averaged 10.2 million bpd last week, with refineries processing an average 17 million barrels of crude daily. Distillate production stood at 5.3 million barrels per day.
This week’s oil price movement has been firmly in the upward direction and EIA’s report is unlikely to have a strong negative impact on this. All eyes are now on the Middle East waiting for what will happen next in Syria. Though no major producer, Syria has become the arena of yet another proxy war with too many participants, including several major oil producers.
At the time of writing, Brent traded at US$71.58 a barrel and WTI was at US$66.14 a barrel but this may change when the EIA releases production figures for last week later in the day. Production has been growing steadily since the start of the year. While the daily average for the first week of January was 9.49 million bpd, the average for the week to March 30 was 10.46 million barrels daily.
By Irina Slav for Oilprice.com
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