U.S. crude oil inventories increased by 2.93 million barrels this week, according to this week's American Petroleum Institute (API) inventory report published on Tuesday afternoon, compounded by larger than expected builds in gasoline and distillates as well.
Despite OPEC's apparent adherence to the agreed upon production cuts so far, today's news that crude oil inventories rose for the third week in a row will no doubt weigh heavily on the price of oil after last Friday, Baker Hughes reported 35-rig increase to the number of oil and gas rigs active in the United States-the largest single-week increase in years.
Up until the API's data release, Brent crude has traded fairly flat since Friday's rig count release. Brent crude was trading at $55.40 ($55.45 on Friday), while WTI crude traded at $53.16 ($53.33 on Friday). Within minutes, both benchmarks began to fall.
The API reported a 4.85-million-barrel build in gasoline inventories, and a 1.95-million-barrel build to distillates.
Supplies at the Cushing, Oklahoma, facility fell this week by 145,000 barrels, compared to analyst expectations of a much larger 500,000-barrel draw.
Last weeks' EIA report showed a crude oil inventory build of 2.3 million barrels despite a 5.04-million-barrel draw reported by the API a day earlier; and a 6-million-barrel build to gasoline compared with a 9.75-million-barrel build reported by the API. The two reports are often conflicting, and all eyes will be on tomorrow's inventory report by the EIA to see whether the industry body will solidify the falling prices by reaffirming today's inventory builds as reported by the API-and if so, to what degree.
At 5:06pm EST, WTI Crude was trading at $52.96, with Brent Crude trading at $55.24.
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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