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The American Petroleum Institute (API) reported a 1.5-million-barrel build in its latest data release on Tuesday afternoon. The build to crude inventory sent oil prices downward, even though a build, although more modest, was expected. Analysts had forecast a 1.2 million-barrel build.
This is the first increase to crude inventory in eight weeks.
What the market was hoping for was another draw week, which would have been eight straight weeks of declines to crude inventory.
Oil prices were already trading down more than 2% on Tuesday before the data release on a strong dollar, rising US production, and reservations that OPEC would follow through with its promised cuts—although Saudi Arabia and a handful of other OPEC members do appear to be putting on the brakes. Iraq, however, is upping February exports from its Basra port to all-time highs, worrying markets.
Last week, the API reported a large draw on crude inventories, down 7.4 million barrels from the week prior, marking the fifth draw in seven weeks, and the largest draw since September 2016.
Crude inventory at the Cushing, Oklahoma facility saw a draw of 187,000 barrels, after last week’s 482,000-barrel build.
Shocking the markets further was a gasoline build of 1.7 million barrels, which although not a huge figure by itself, is tough to swallow combined with last week’s massive 4.25-milllion-barrel build, which was largest build in gasoline stocks in a year.
Distillates also climbed by 5.5 million barrels, after last week’s 5.24-million-barrel build.
Markets will now look to substantiate this afternoon’s API release with tomorrow’s EIA inventory report.
WTI was trading down after the data release 2.27% at $50.78, and Brent was trading down 2.44% at $53.60.
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.