The American Petroleum Institute (API) reported a moderate build of 1.156 million barrels of United States crude oil inventories for the week ending March 9, according to the API data. Analysts had expected a build of 2.023 million barrels in crude oil inventories.
Last week, the American Petroleum Institute (API) reported a huge build of 5.661 million barrels of crude oil, with a draw for gasoline that saw an inventory shed of 4.536 million barrels for the fuel.
This week, the API reported a smaller build for crude oil, and another draw for gasoline. This week, the API reported a draw of 1.262 million in gasoline stockpiles, largely in line with the 1.176-million-barrel draw that analysts had expected.
Both benchmarks were down on Tuesday, with the WTI benchmark down by $.81 (-1.32%) at $60.55-nearly $2 below last week's levels, while Brent traded down $0.49 (-0.75%) at $64.46 at 3:26 pm EST.
A multitude of factors were weighing on oil prices, but one factor stands out among the rest, and that's the steadfast climb of US crude oil production, which for the week ending March 2 increased again, coming in at 10.369 million bpd-close to the 10.7 million bpd figure that the EIA suspects we will see in 2018. The first week in January saw the United States producing just 9.492 million bpd. That's almost a 1-million bpd rise in just a bit over two months.
Other factors pressing downward include a rising US oil and gas rig count, which has seen a 60-rig increase since the start of the year.
Distillate inventories saw a large draw this week of 4.258 million barrels. Analysts had forecast a smaller decline of 1.519 million barrels.
Inventories at the Cushing, Oklahoma, site decreased by 156,000 barrels this week.
The U.S. Energy Information Administration report on oil inventories is due to be released on Wednesday at 10:30a.m. EST.
By 4:35pm EST, the WTI benchmark was trading down 1.17% on the day to $60.64 while Brent was trading down 0.65% on the day at $64.53.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More
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Comments
I think after march ends, we will see some great things developing. Tensions are being removed, economies will (most likely) still be picking up. Yes, the US will increase its production... but at this rate, its hard to see it keeping up with the increase on global demand.
All said and done, many factors can make this tilt in either direction. So, as volatility is its game so is the massive risk.
Question i have right now, is if the Saudis 70$ target is too ambitious. At least near term. At this point in time, i think 60$ is a sweet spot. Many companies are still struggling, many are still not spending on exploration. This all will translate to very healthy numbers in the coming years. 70$ might be the number to tick on explorations , however. I think the Saudis need to be very careful going forward in that they dont make the same mistake as before.