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Oil Reverses After API Reports Inventory Build Across The Board

The American Petroleum Institute (API) reported on Tuesday a build in crude oil inventories of 1.973 million barrels for the week ending December 11.

Analysts had predicted an inventory draw of 1.937 million barrels for the week.

In the previous week, the API reported a build in oil inventories of 1.141-million barrels, after analysts had predicted a draw instead, of 1.514 million barrels.

Both Brent and WTI were up on Tuesday afternoon before the data release, despite OPEC's MOMR on Monday that showed the group's oil production had risen for November while adjusting downward its forecast for oil demand. Oil prices also remain high despite signs that more—and stricter—lockdowns are likely.  

Vaccine optimism and the first vaccine doses given this week is what appears to remain the prime ruler of today's oil market. 

In the run-up to Tuesday's data release, at 3:28 p.m. EDT, WTI had fallen by $0.57 (+1.21%) to $47.56, up nearly $2 per barrel on the week. The Brent crude benchmark had risen on the day $0.42 at that time (+0.84%) to $50.71—also up nearly $2 per barrel on the week.

U.S. oil production was steady at 11.1 million bpd for the week ending December 4, according to the Energy Information Administration—2.0 million bpd lower than the all-time high of 13.1 million bpd reached in March.

The API reported a small build in gasoline inventories of 828,000 barrels of gasoline for the week ending December 11—compared to the previous week's 6.442-million-barrel build. Analysts had expected a 1.614-million-barrel build for the week.

Distillate inventories were up by 4.762 million barrels for the week, compared to last week's 2.316-million-barrel increase, while Cushing inventories fell tis week by 165,000 barrels.

At 4:40 p.m. EDT, the WTI benchmark was trading at $47.52, while Brent crude was trading at $50.68.

By Julianne Geiger for Oilprice.com

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  • George Doolittle on December 15 2020 said:
    It is rather paradoxical that such massive domestic production of oil combined with plunging exports of oil and soaring imports of oil would cause the price of oil to surge... particularly so as the USA proceeds with sudden amazing haste to an all electric pure battery power driven transportation economy insofar as gasoline is concerned. (Diesel and kerosene fuel obviously not so in the least). Even from a commercial scale of goods movement via ship or rail the demand for oil based distillate fuels and materials is amazingly limited at the moment and indeed hydrogen battery powered names have been what is powered the current energy boom forward and not Tesla (Ballard Power, Plug Power, etc). So far select utility names have not "broken out" to well above all time record closing highs ($duk Duke Energy, $xel Xcel Energy, $AEP American Electric Power) but certainly all three look set to do just that in the coming weeks if not days even.

    We shall see what this EIA report brings as the previous deviated so much and profoundly so from the API report...but of course no one is arguing there is some type of "energy crisis" in the least at the moment no matter what the EIA report will state tomorrow as fact rather than API as conjecture did today. Coal prices remain almost exactly where they were nearly 100 years ago...if not lower...with natural gas prices at an apparent price minus takeaway costs of basically "free."

    I therefore reiterate my call for the illegal and unconstitutional but worse still just plain stupid US Federal Government excise tax on gasoline to be reduced to zero effective immediately. "It ain't like you heat your home with it"(let alone get the fuel necessary to heat your home with it). Talk about a tax on the poor and those on fixed income! "Regressive" indeed.

    But of course mere trillions more to be squandered on who knows what this go around and "The Covid-19." God forbid if the vaccines given to all our healthcare workers right now as an "emergency" winds up killing 90% of them.

    That would seem to be a public policy failure beyond any that has ever happened in the History of the United States. That would make every Hospital in the United States a "pandemic hotspot" con gusto as well so obviously all of them could only function remotely meaning with the zero physical presence of any Doctor or Nurse.

    Sure sounds expensive let alone a "real killer"(so to speak) of a situation.

    Just in time for a transition in power from one President to the next no less.

    What are odds you ask?
    I put them at this having played out now at precisely 100%...right up there with how the election results were ahem "counted" ahem..

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