Analysts had expected a much more modest build of 1.515 million barrels for the period.
This latest build adds to a string of six weekly inventory increases over the last seven weeks, with just one weekly decline. The string has added more than 30 million barrels to inventories, with the one single decline taking 1.7 million barrels out of this accumulation.
A day earlier, the American Petroleum Institute estimated U.S. crude oil inventories had added 4.26 million barrels, which although without an immediate effect on prices, contributed to a deteriorating sentiment after OPEC warned that oil demand is weakening globally.
The cartel warned in its new World Oil Outlook demand for its own oil over the next two years would be significantly lower than previously expected, pressured by the triple weight of slowing economic growth around the world, rising non-OPEC supply, and climate change activism.
Following the news and API’s crude oil inventory estimate, prices finally gave up and started down, despite optimism about a U.S.-China trade agreement, driven by statements from negotiators from both sides that one may be reached before the end of the month.
Meanwhile, the EIA reported a 2.8-million-barrel decline in gasoline inventories and a 600,000-barrel decline in distillate fuel stockpiles. This compared with a gasoline inventory decline of 3 million barrels for the previous week and a 1-million-barrel fall in distillate fuel inventories. Related: Protect The Oil: Trump’s Top Priority In The Middle East
Refineries processed 15.8 million barrels daily last week, the EIA also said, and produced 10 million bpd of gasoline and 4.9 million bpd of distillate fuels. This compared with daily production of 10.2 million barrels of gasoline and 5 million barrels of distillate fuels in the week prior.
Imports last week averaged 6.1 million barrels daily, down from 6.7 million bpd a week earlier.
By Irina Slav for Oilprice.com
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