The American Petroleum Institute (API) reported a build of 851,000 barrels in United States crude oil inventories, compared to analyst's rather steady-as-she-go-yet-still-too-optimistic expectations that this week would see between a 2.3-million-barrel and 3.25-million-barrel draw for the week ending June 23.
Today's build is likely to take all the wind out of any remaining optimists' sails, after prices recovered earlier Tuesday by about 2% as investors prematurely priced in what they thought would be a small crude oil inventory draw for the week. Covered short positions and a weaker dollar also contributed to today's rise in prices, which now will surely fall in the wake of both crude oil and gasoline builds.
WTI had gained 2.01% by 3:00pm EST to trade at $44.25, while Brent was trading up 1.85% at $46.68. Gasoline was trading up 1.59% at $1.4616.
Prices were unable to go much higher earlier on Tuesday as Libya reported increased crude oil production, up to 935,000 barrels per day, according to Tuesday reports, up from an average of 885,000 barrels per day last week.
This week's build, according to the API, brings the total inventory build in 2017 to 14.97 million barrels.
Gasoline inventories rose this week by 1.351 million barrels, as refiners keep on keeping on despite insufficient demand for the fuel. Surveyed analysts had expected a 900,000-barrel draw for the fuel. This week's build will likely bring in lower retail gasoline prices for the roughly 37.5 million motorists that will be traveling in the US over the Independence Day holiday.
Distillate inventories rose this week as well, by 678,000 barrels, while inventories at the Cushing, Oklahoma, site-the only draw this week-fell by 678,000 barrels.
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By 4:40pm EST, WTI was trading at $43.90, with Brent Crude trading at $46.34.
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. More
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