The American Petroleum Institute (API) reported a moderate build of 3.229 million barrels of United States crude oil inventories for the week ending January 23, according to the API data. Analysts had expected only a small build of 126,000 barrels in crude oil inventories.
Last week, the American Petroleum Institute (API) reported a surprise build of 4.755 million barrels of crude oil, along with a hefty increase in gasoline inventories of 4.117 million barrels.
This week, the API is reporting another build in gasoline inventories, this time of 2.692 million barrels for the week ending January 23. Analysts had expected a smaller 1.809-million-barrel build.
The WTI and Brent benchmarks both saw substantial losses on Tuesday as the reports of the market fearing increased production levels in the United States surfaced, with US oil production expected by some to rise above 10 million bpd as early as this week, with some fearing the US may drown in oil.
At 2:49pm EST, WTI was trading down 1.60% (-$1.05) at $64.51. The Brent benchmark was trading down 0.94% (-$0.65) at $68.55.
Distillate inventories saw a large decrease this week of 4.096 million barrels, compared with the forecast for much smaller decline of 1.454-million-barrels.
Inventories at the Cushing, Oklahoma, site decreased by 2.383 million barrels this week.
While US crude oil inventories are up for the week, production for week ending January 19 is also up, coming in at 9.878 million bpd, yet another new high.
The U.S. Energy Information Administration report on oil inventories is due to be released on Wednesday at 10:30. EST.
By 4:35pm EST, the WTI benchmark was trading down further at 1.82% on the day to $64.37 while Brent was trading down 1.27% on the day at $68.32.
By Julianne Geiger for Oilprice.com
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Comments
The EIA and the IEA start with projections for US shale oil production in 2018 and 2019 and end up treating them as a reality. My projection for US shale oil production for 2018 is 9.25 million barrel a day (mbd) made up of 5.1 mbd of shale oil and 4.15 mbd of conventional oil. My projection allows for a 5% annual depletion in US conventional oilfields.
Shortly, oil prices will resume their surge. I am projecting that prices could go beyond $70/barrel in 2018 rising to $80/barrel by 2019. After 2019 the sky is the limit.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London