The American Petroleum Institute (API) reported a build of 11.6 million barrels in United States crude inventories against expert predictions that domestic supplies would see a much kinder 1.4-million-to 1.66-million-barrel build.
The build in crude oil inventories was almost 10 times what analysts had predicted and marks yet another new high in U.S. inventories. The chart below displays a 10-week cumulative build of 35 million barrels, per API data, since the beginning of the year
Cumulative changes in crude oil stocks since Jan 4, 2017
(Click to enlarge)
A few hours before the API data release, WTI and Brent benchmarks were both down despite Libya's recent production woes, which were offset by Russia's unimpressive less-than-50%-adherence to the production cuts. At 2:11 pm EST, WTI was trading down .04% at $53.18-about $.80 down on the week-while Brent was trading down .11% at $55.95, or $.55 down from this time last week.
Adding to this week's bad news for oil markets, the API also reported a 788,000-barrel build in inventories at the Cushing, Oklahoma facility.
Gasoline inventories provided significant respite to this week's crude oil build, falling 5 million barrels, sending gasoline prices for the fuel upwards. The gasoline draw, according to Zerohedge, is the largest draw since April 2014. A half hour after the data was released, gasoline was trading up .79% on the day at $1.6855.
Distillates stocks also saw a draw of 2.9 million barrels.
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West Texas Intermediate (WTI) prices began to contract after the API report's release, with WTI trading at $52.83 and Brent trading at $54.64.
Earlier on Tuesday, the Energy Information Administration (EIA) forecast that US crude oil production would reach new heights by 2018, to 9.7 million barrels per day. The market will watch tomorrow's EIA inventory report at 10:30EST to see whether this week's massive build as reported by the API is confirmed.
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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The U.S. government in December approved legislation that permitted the sale of 25 million barrels of oil from the Strategic Petroleum Reserve over the next three years, with the first sale of 10 million barrels scheduled for late February.
http://www.upi.com/First-sale-of-US-strategic-oil-scheduled/6761486636223/