Crude oil deepened its latest losses after the Energy Information Administration reported a 2.4-million-barrel build in crude oil inventories for the week to September 20.
This compares with a build of 1.1 million barrels for the previous week. Analysts had expected a decline of 6.5 million barrels for the week to September 20.
Crude oil was trading lower yesterday, after the American Petroleum Institute did its already regular weekly surprise trick, saying inventories had gone up by 1.38 million barrels last week. Now, prices are bound to fall further.
Oil prices slid down yesterday, after remarks about China U.S. President Donald Trump made at the UN General Assembly.
"Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale," Trump said, pouring cold water over hopes that a deal between China and the United States is coming anytime soon.
These dashed hopes also reinforced the chronic worry about global economic growth and the consequent worry about oil demand.
Meanwhile, the EIA also reported a 500,000-barrel increase in gasoline stockpiles for the week to September 20, as well as a 3-million-barrel draw in distillate fuel inventories. This decline in distillate fuel inventories is unlikely to have the power to offset the effect from the crude oil and gasoline inventory builds.
In production, the authority reported an average daily rate of 10.2 million barrels for gasoline and 5 million barrels for distillate fuels. This compares with 9.5 million bpd of gasoline and 5.1 million bpd of distillate fuels a week earlier.
At the time of writing, Brent crude was trading at $60.52 a barrel and West Texas Intermediate was trading at $55.81 a barrel.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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