The American Petroleum Institute (API) reported a surprise build of 1.779 million barrels in United States crude oil inventories, compared to S&P Global Platts survey of analysts who expected a draw of 2.8 million barrels for the week ending July 21. This week's build comes after a major draw last week.
Gasoline inventories fell this week, more sharply than expected, with a 4.827-million-barrel draw for the week ending July 28, compared to analyst expectations that inventories for the fuel would fall by 1.3 million barrels.
Crude prices began to slip on Tuesday despite the expectations of another draw in crude oil stockpiles this week, as reports surfaced that OPEC's crude oil exports rose 388,000 bpd in July, according to figures from energy data provider Kpler. Prices had increased on Monday on news that the United States might impose sanctions on Venezuelan oil-but that possibility is now looking more remote.
At 12:24pm, WTI had fallen 3.05% to $48.64, with Brent Crude down 2.94% at $51.17. per barrel. WTI had opened above $50 on Tuesday for the first time since May.
Gasoline was also trading down on the day before the data release, by 1.94% at $1.644.
Crude oil inventories in the US began its downward slide in early April, and have continued to fall, erasing all of the inventory that was built between January and April. According to the API, today's build brings the total inventory for crude oil in 2017 to a net draw of 5.755 million barrels.
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Distillate inventories also fell this week, by 1.225 million barrels, while inventories at the Cushing, Oklahoma, site increased by 2.562 million barrels.
By 4:39pm EST, WTI was trading at $49.15 with Brent Crude trading at $51.75.
The U.S. Energy Information Administration report on oil inventories is due 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. More
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