Oil Prices Under Pressure After API Reports Crude Inventory Build

The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 4.174 million barrels for the week ending November 13.

Analysts had predicted an inventory build of 1.95-million barrels.

In the previous week, the API reported a large draw in oil inventories of 5.147-million barrels, after analysts had predicted a draw of 913,000 barrels for the week.

Oil prices were trading down on Tuesday afternoon before the API's data release despite significant vaccine news, as OPEC+ indicated that it could extend its current production cuts for an additional three months. Pressuring prices include widespread lockdowns, weaker than anticipated economic data in the United States, and Libya's surging oil production. 

In the runup to Tuesday's data release, at 11:53 a.m. EDT, WTI had fallen by $0.48 (-1.16%) to $40.86 down roughly $0.50 per barrel on the week. The Brent crude benchmark had fallen on the day by $0.61 at that time (-1.39%) to $43.21—down about $0.40 per barrel on the week.

But oil prices ticked higher in the later afternoon hours.

U.S. oil production was unchanged in the last reporting week, at 10.5 million bpd, according to the Energy Information Administration—2.6 million bpd lower than the all-time high of 13.1 million bpd reached in March.

The API reported a build in gasoline inventories of 256,000 barrels of gasoline for the week ending November 13—compared to the previous week's 3.297-million-barrel draw. Analysts had expected a 450,000-barrel build for the week.

Distillate inventories were down by 5.024-million barrels for the week, compared to last week's 5.619-million-barrel draw, while Cushing inventories rose by 176,000 barrels.

At 4:39 pm EDT, the WTI benchmark was trading at $41.45 while Brent crude was trading at $43.87.

By Julianne Geiger for Oilprice.com

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