The American Petroleum Institute (API) reported a build of 2.791 million barrels in United States crude oil inventories, compared to analyst expectations of a build of 4.022 million barrels for the week ending September 1.
Gasoline inventories fell by 2.544 million barrels for the week ending September 1, against a larger expected draw of 5.0 million barrels.
That US crude oil inventories would build in the wake of Hurricane Harvey was largely anticipated, with some saying as much as 40-60 million barrels could be added to inventory while shuttered refineries struggle to come back online.
"We could see a buildup in inventories…of 40 to 50 million barrels on the back of this refining outages, which is what's pressing WTI prices lower," Francisco Blanch, Bank of America Merrill Lynch's head of global commodity and derivatives research, told CNBC last Friday. "I think WTI is going to stay weak for a while. We expect at least 40 million barrels of demand loss over the course of the whole Hurricane episode. It could be 50, it could be 60, depending on what the damage is to refineries."
Crude oil prices rose on Tuesday and Wednesday, with WTI climbing 1.03% by 4:15pm EST to $49.16, and Brent prices increasing by 1.59% to $54.23. Gasoline prices continued to slip as Gulf Coast refining capacity picks itself up by the bootstraps, down 1.19% on the day at $1.6789.
Weekly crude oil inventory draws have still failed to climb with any significant meaning-a fact which has not deterred oil production in the US, which is climbing at a slow and steady pace, reaching 9.530 million bpd for the week ending August 25-about 380,000 bpd off from the most recent 2018 daily average proposed by the EIA's Short Term Energy Outlook of 9.91 million barrels.
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Despite this week's crude oil inventory build, over the last ten weeks, according to the API, crude oil inventories in the United States have shed almost 50 million barrels.
Distillate inventories fell this week, by 603,000 barrels, while inventories at the Cushing, Oklahoma, site increased by 669,000 barrels.
By 4:36pm EST, WTI was trading at $49.14 with Brent Crude trading at $54.23.
The U.S. Energy Information Administration report on oil inventories is due on Thursday at 11:00 a.m. EDT-a one-day delay due to the US holiday.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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