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The American Petroleum Institute (API) reported a build of 1.628 million barrels in United States crude oil inventories, compared to analyst’s expectations that this week would see a draw of 3 million barrels for the week ending July 14.
Gasoline inventories saw a significant drawdown, although unlikely to totally offset those who were expected a draw in crude oil inventories. Gasoline inventories fell by 5.448 million barrels for the week ending July 14, compared to analyst expectations that inventories for the fuel would fall by only 500,000 barrels.
Crude prices were up on Tuesday afternoon on expectations that the United States would see a drop in inventories for a third week running and reports that Saudi Arabia is considering further oil export cuts to the tune of 1 million barrels per day in its attempt to hasten the crude oil inventory drawdown OPEC and NOPEC has been trying to usher in since December 2016 via production cuts.
At 1:24pm EST, WTI was trading up .11% at $46.07—about $1.00 over this time last week. Brent crude was trading up .23% at $48.53. Just a couple hours later, both benchmarks were continuing their climb, with WTI at $46.41 and Brent at $48.85.
Gasoline was also trading up on the day before the data release, by 1.09% at $1.5737—a 6-cent gain over this time last week.
Despite the Nervous Nelly attitude that has existed in the oil market for some time—in part brought about by OPEC’s sullied reputation for adhering to what many thought would be painful cuts for the coalition of mostly oil-dependent states—inventories in the US have drawn down substantially in the last few months, even with this week’s small build. According to the API, today’s build brings the total inventory build for crude oil in 2017 to 2.696 million barrels.
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And while the API and EIA data do not always match, the trend over the last 15 weeks from both sources have told the same story: US crude oil inventories are drawing down. Over that timeframe, inventories have decreased an average of 2.88 million barrels per week according to the EIA (14 weeks of data), and 2.435 million barrels per week according to the API (15 weeks of data).
Related: The Only Way OPEC Can Kill U.S. Shale
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Distillate inventories fell this week by 2.888 million barrels, compared to analyst expectations of a smaller 700,000-barrel draw.
Inventories at the Cushing, Oklahoma, site increased by 608,000 barrels.
By 4:44pm EST, WTI was trading at $46.33, with Brent Crude trading at $48.80.
The U.S. Energy Information Administration report on oil inventories is due on Wednesday at 10:30 a.m. EDT.
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.