Oil prices fell on Tuesday after the American Petroleum Institute's (API) weekly report showed a large build of 4.68 million barrels in the United States' crude inventory levels, instead of the expected 1.5 million-barrel draw.
The build comes after last week's report from the Energy Information Administration (EIA) that showed a 2.4 million barrel drop in commercial inventories the week prior.
Gasoline inventories have seen builds over the past five weeks, just as winter takes over and demand for the product declines. This time around, gasoline saw the biggest jump - 3.905 barrels - since January.
Crude levels at the Cushing, Oklahoma storage facility increased by 632,000 barrels - far lower than the 3.2 million barrel jump experts anticipated, according to Zero Hedge. Still, crude levels at the site have been on the up-and-up since October, and this week's report continues the trend, with a monumental build of 4.01 million barrels as of last week's report-the biggest weekly build since 2008, according to the agency.
This edition of API projections will either be confirmed or denied in tomorrow's official EIA data. Since the last report, suspicions regarding the effectiveness of the OPEC deal have been dampened as Saudi Arabia, Iran and other partners affirmed their adherence to the quotas outlined in the agreement.
"There's obvious optimism from the bulls on OPEC's ability to come to an agreement with non-OPEC," Paul Crovo, Philadelphia-based oil, equities analyst at PNC Capital, told ZH over the phone. "At the same time, there's a reasonable level of trepidation" regarding supply response from U.S. shale
The price of WTI was down 0.83% to $52.39 a half hour after data release, while Brent traded down 0.88% at $55.20. Gasoline prices were down 0.85% to $1.5299.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
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