U.S. crude oil inventories increased yet again by 9.94 million barrels, according to this week's American Petroleum Institute (API) inventory report published on Tuesday afternoon, reminding OPEC that its cuts are but a gaping window of opportunity for U.S. shale producers.
Oil prices were on the rise prior to this week's API inventory data release, with the market sentiment largely one of positivity as all indications are that OPEC is indeed trimming the fat when it comes to oil supply. But as has been the case over recent weeks, the upward trend in prices after OPEC releases good tidings regarding its members' adherence to production cuts are often undone-or at best range-bound-by the few members that are not adhering to (Iraq, UAE, Venezuela, Algeria) or aren't bound by (Libya, Nigeria) the production cut, along with unfavorable weekly oil stock data courtesy of the API and Energy Information Administration (EIA) that show US stocks continue to rise.
Next month, US shale oil production is expected to rise by 79,000 barrels per day-the highest increase in five months-to 4.87 million bpd, its highest rate of since May last year, EIA data showed on Monday.
Prior to the API's data release, Brent crude was trading up $0.36 at $55.95, while WTI crude was trading up $0.26 at $53.19.
The API also reported a 720,000-barrel build in gasoline inventories, with a 1.5 million barrel build in distillates inventories.
Supplies at the Cushing, Oklahoma, facility fell this week by 1.27 million barrels, contradicting analyst expectations that this week would see a build at the Cushing facility of 500,000 barrels.
Last weeks' EIA report showed a huge 13.8-million-barrel build in crude oil inventories.
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