Oil prices fell slightly on Wednesday morning after the Energy Information Administration reported a moderate 800,000-barrel increase in crude oil inventories for the week to November 13, a day after the American Petroleum Institute estimated a 4.17-million-barrel inventory build.
The EIA estimate for last week compares with analyst expectations for a build of 1.95 million barrels, after last week the authority reported a considerable increase in inventories, at 4.3 million barrels that capped oil’s gains at the time.
In gasoline, the EIA reported an inventory build of 2.6 million barrels for the week to November 13, compared with a decline of 2.3 million barrels for the previous week. Gasoline production averaged 9.1 million bpd last week, versus 9.3 million bpd a week earlier.
In distillate fuels, the authority estimated an inventory decline of 5.2 million barrels, which compared with a hefty 5.4-million-barrel draw a week earlier. Distillate fuel production went up last week, averaging 4.3 million bpd.
Oil has been trending higher overall since last week after Pfizer announced potentially promising early results from its Phase 3 vaccine trial. This week, Moderna followed suit, announcing potentially strong efficacy results from its own late-stage vaccine trial.
In further support for oil prices, OPEC+ agreed it may be best to extend the current level of production cuts—7.7 million bpd—until at least the end of March 2021, although a longer extension, until the end of June, was also discussed.
Despite the strong support from vaccine makers and OPEC+, API’s weekly inventory estimate came as an unpleasant surprise, after analysts had expected a much more moderate inventory build of 1.7 million barrels. As a result, prices slipped following the API.
At the time of writing, Brent crude traded at $44.51 a barrel and West Texas Intermediate traded at $42 a barrel, both slightly up from opening.
By Irina Slav for Oilprice.com
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