Oil Prices Slide After API Reports Large Crude Build

The American Petroleum Institute (API) reported a crude oil inventory build this week, this time of 7.83 million barrels for the week ending November 2. The build was the fifth in as many weeks as reported by the API. The report was largely in line with analyst expectations that this week would see another substantial build in crude oil inventories of 2.050 million barrels.

Inventories in the Cushing, Oklahoma facility this week had climbed by 3.07 million barrels, adding to the inventory builds this week.

Prices were down significantly on Tuesday as the Iranian sanction waivers granted by the United States to eight countries—including oil-hungry India and China—took the sting out of what could have been market panic given the re-imposition of sanctions on Monday.

At 11:07 am EST, WTI was trading down 1.24% (-$0.78) at $62.32—nearly $4 per barrel lower than this time last week. The Brent crude benchmark was trading down 1.27% (-$0.93) at $72.24, also a roughly $4 per barrel decline week on week. Prices slipped further in the hours that followed leading up to Tuesday’s data release on the state of crude oil inventories.

The API reported a draw in gasoline inventories for week ending November 2 in the amount of 1.2 million barrels. Analysts had predicted a draw of 2.572 million barrels for the week.

U.S. crude oil production as estimated by the Energy Information Administration showed no change in production for the week ending October 26 at 11.2 million bpd—resuming the earlier forever-high reached on October 05.

Distillate inventories were down this week by 3.64 million barrels, compared to a smaller expected draw of 2.775 million bpd.

The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EST.

By 4:40pm EST, WTI was trading down at $62.18 and Brent was trading down at $72.07.

By Julianne Geiger for Oilprice.com

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