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Oil Crumbles As API Reports Large Crude Build

Whiting Refinery

With oil prices already down on the day, the American Petroleum Institute (API) reported a large build of 3.427 million barrels of United States crude oil inventories for the week ending April 27, compared to analyst expectations that this week would see a smaller build in crude oil inventories of 739,000 barrels.

Last week, the American Petroleum Institute (API) reported a draw of 1.099 million barrels of crude oil.

The API reported a build in gasoline inventories for week ending April 27 in the amount of 1.602 million barrels—a surprise given the 587,000-barrel draw that analysts had expected.

Oil prices fell on Tuesday, with the WTI benchmark trading down $1.13 (-1.65%) at $67.44 at 4:12pm EST. The Brent benchmark was trading down $1.42 (-1.90%) at $73.27—both down from last week’s prices as the dollar rallied and as traders feared higher crude oil inventory figures. Neither fear over US sanctions on Iran nor OPEC’s strong showing in its compliance to the production cuts could hold oil prices up.

Brent topped $75 a barrel last Tuesday for the first time since November 2014, and according to analysts, the possibility of sanctions on Iran has been the most significant driver of the oil price rally in recent weeks.

US crude oil production for the week ending April 20—the most recent data available, increased to 10.586 million bpd, according to the EIA.

Related: Shell Wants Deepwater Breakevens Below $40

Distillate inventories saw another draw this week of 4.083 million barrels. Analysts had forecast a smaller decline of 1.360 million barrels.

Inventories at the Cushing, Oklahoma, site fell this week, with the API reporting a 725,000-barrel draw.

The U.S. Energy Information Administration report on oil inventories is due to be released on Wednesday at 10:30a.m. EST.

By 4:37pm EST, the WTI benchmark was trading down -1.58% on the day at $67.49 while Brent was trading down -1.77% at $73.37.

By Julianne Geiger for Oilprice.com

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  • Bill Smith on May 02 2018 said:
    It is not just this author but the excessive use of hyperbole in the media get's tiresome. It's not just "crumbling", it's the beginning of a "devastating slide." You have to admit though that it's more interesting than "Oil price decrease by 1.5% on standard inventory reporting. May increase or decrease by 1.5% tomorrow."

    The converse of course is true. If it goes up 1.5% tomorrow, the price is not "soaring."
  • C on May 02 2018 said:
    Go long oil boys, oil and nat gas for that matter is in a supercycle driven by solid demand, slow oil investment, slow ecar adoption, and global econ growth – oil will fetch the highest global price; US prodn will be exported keeping prices high in the US and money coming in for oil – next few years will be cash is king for oil supercycle years. Rich rich rich! Btw, if it isn’t obvious, airlines drop as profits shift from transport to oil.
  • Crosby on May 01 2018 said:
    How do analysts come up with their predictions?
  • Butasha on May 01 2018 said:
    Crumbles, simply amazing. I guess if one super tanker had unloaded a day later his headine would have been 3mill shortage and the price of oil is soaring due to surprise drop in inventories.
  • Kramer23 on May 01 2018 said:
    I know it's anal as hell, but can you either write ET or EDT? EST is for winter months when we are NOT observing Daylight Savings Time. Thanks!
  • adec on May 01 2018 said:
    I had to double check the definition of "crumble" but still I am confused.

    Do articles like this tell people anything?
  • Pepe Petit on May 01 2018 said:
    Crumble is a good high frequency trading word (shock and awe reporting). I was wondering why I haven't seen any articles about the +800,000 barrels released from the SPR last week. $80 oil won't derail the economy, but the left wing media just might.
  • Disgruntled on May 01 2018 said:
    Oh, they're even-handed, Gg. When oil goes up 50 cents it is described as "soaring".
  • Ggg@gmail.com on May 01 2018 said:
    Having read your article I am surprised by the use of the word crumble to describe how the price has fallen from 75 dollars to slightly under 74 dollars. There seems to be a consistent effort to play down the price of oil and to exaggerate any falls. Please can we have balanced reporting.

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