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Oil Price Losses Mount After API Reports Huge Inventory Build

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The American Petroleum Institute (API) reported a huge build of 9.88 million barrels of United States crude oil inventories for the week ending October 19, compared to analyst expectations that this week would see a hefty build in crude oil inventories of 3.694 million barrels.

Last week, the American Petroleum Institute (API) reported a surprise draw in crude oil inventories of 2.13 million barrels for the week. One day later, the Energy Information Administration reported a build instead, of 6.5 million barrels.

The API reported a draw in gasoline inventories as well for week ending October 19 in the amount of 2.8 million barrels. Analysts had predicted a draw of 1.878 million barrels for the week.

Oil prices were down sharply in afternoon trading prior to the release of the API data on inventories as the stock market lost ground earlier in the day. While the Dow Jones regained some ground in late afternoon trading, oil prices continued their decline.

At 4:05pm EDT, WTI was trading down a staggering 4.50% (-$3.12.) at $66.24—a more than $5 loss in a week. The Brent crude benchmark was trading down 4.41% (-$3.52.) at $76.31, down from $81.30 a week ago at this time.

Inventories at the Cushing, Oklahoma, site increased this week by 971,000 barrels.

US crude oil production as estimated by the Energy Information Administration showed a production decline for the week ending October 12, falling to 10.9 million bpd—300,000 bpd off last week’s record production of 11.2 million bpd.

Distillate inventories were down this week by 2.4 million barrels, compared to a larger expected draw of 1.927 million barrels.

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

By 4:38pm EDT, WTI was trading down at $66.29 and Brent was trading down at $76.38.

By Julianne Geiger for Oilprice.com

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  • Brandon on October 24 2018 said:
    I still can't figure out where do these big discrepancies between the API and EIA weekly reports come from. Moreover, my understanding is that oil inventories are measured including heavy and light oil but as we know the US import nearly half of the heavy oil needed by their refineries and export basically only domestic light "shale oil" that cannot be consumed internally.
    The point is : how much of this is influencing API and EIA figures? It looks a significant distorting factor to me, leading to an overestimate of actual inventory of "internally usable oil" if I can say so. Can anyone please elaborate on that?

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