API Reports Moderate Crude Build, Oil Glut Reaches New Record

The American Petroleum Institute (API) reported a build of 2.502 million barrels in United States crude inventories against expert predictions that domestic supplies would see a 2.8-million-barrel build.

While the build in crude oil inventories was smaller than analysts had predicted, it marks a new high in US inventories. The chart below displays the cumulative build, per API data, since the beginning of the year, based on this data:

API
4-Jan -7,400,000
10-Jan 1,500,000
18-Jan -5,042,000
24-Jan 2,930,000
31-Jan 5,800,000
7-Feb 14,227,000
14-Feb 9,940,000
22-Feb -884,000
28-Feb 2,502,000

Cumulative changes in crude oil stocks since Jan 4, 2017

The inventory picture based on EIA data is even less rosy:

EIA
5-Jan -7,100,000
12-Jan 4,100,000
19-Jan 2,300,000
25-Jan 2,800,000
1-Feb 6,500,000
8-Feb 13,800,000
15-Feb 9,500,000
23-Feb 600,000

Cumulative changes in crude oil stocks since Jan 5, 2017

Moments before the API data release, WTI and Brent benchmarks were divided with WTI trading down 0.19% at $53.95, and Brent trading up 0.11% at $56.48 after an earlier Reuter's survey showed OPEC's cut compliance had reached 94% in February, and the White House quashed rumors that the current ethanol mandate would be changed. This was tempered by fears that crude oil stocks would build yet again-and to record highs-ahead of this afternoon's data.

The API also reported a 544,000-barrel build in inventories at the Cushing, Oklahoma facility.

Gasoline inventories rose despite analyst predictions of a 1.5-million-barrel draw. Instead, gasoline inventories climbed 1.84 million barrels. At 4:54PM, gasoline was trading at $1.71, down 1.57%.

Distillates stocks saw a draw of 3.73 million barrels.

West Texas Intermediate (WTI) prices began to fall after shortly the API report's release, with WTI trading at $53.87 and Brent trading at $56.40.

All eyes will be on the EIA inventory report tomorrow at 10:30EST to see what is in store for crude oil and gasoline stocks.

By Julianne Geiger for Oilprice.com

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