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The American Petroleum Institute (API) reported a build of 2.75 million barrels in United States crude oil inventories, compared to analyst expectations that markets would see a draw of 2.7 million barrels for the week ending June 9—a 5.45-million-barrel discrepancy that is bound to unsettle already unsettled markets.
It seems that oil inventories are particularly unpredictable as of late, with last week, the API and EIA reporting remarkably disparate figures in the amount of crude oil inventory movement—a 7.9-million-barrel discrepancy between the two that fanned the flames of an already shaky market.
This week’s build, according to the API, ends three straight weeks of draws. The EIA reported a build last week, suggesting to some that the API and EIA are not necessarily in disagreement, only out of synch.
Crude oil inventory concerns have lingered, despite OPEC’s curtailment on member and non-member production to the tune of 1.8 million barrels per day, and despite Saudi Arabia’s ratcheting down oil exports to the United States, and promise to ratchet down more, by 35 percent in July.
While this would not affect global inventories, restricting the amount of oil coming into the US should theoretically bring down inventories in the much-watched market, if it weren’t for Iraq’s increased oil exports to the US.
WTI was trading up 0.8% at $46.45 per barrel at 3:11pm EST—more than $1.50 per barrel lower than a week ago—with Brent trading at $48.74, compared to $50.05 per barrel last week.
The upward movement on gasoline inventories for another week was also a huge disappointment, climbing 1.794 million barrels this week, compared to an expected draw of 1.15 million barrels.
Related: Conflicting News Keeps Oil Prices Down
Distillate inventories fell this week by 1.451 million barrels, while inventories at the Cushing, Oklahoma, site fell by 833,000 barrels after last week’s dip of 1.56 million barrels.
By 4:40pm EST, both WTI and Brent Crude started to slide on the news at $46.10 and $48.37 respectively.
The U.S. Energy Information Administration report on oil inventories is due this week on Wednesday at 10:30 a.m. EDT.
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.