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Oil Tanks After API Reports Massive Build In U.S. Crude Stocks

Oil Train

The American Petroleum Institute reported a 4.464 million barrel increase in U.S. crude oil inventories in the biggest build in crude supplies in four months.

These figures are in stark contrast to a survey by Reuters earlier today, which showed an expert consensus for a 0.5 million-barrel draw in crude oil inventories. Similarly, Zero Hedge’s sources expected an 850,000 barrel draw this week, while analysts polled by S&P Global Platts expected a 200,000-barrel rise in U.S. crude inventories. No estimates expected the massive increase in inventory.

Gasoline inventories decreased by 2.2 million barrels – and if confirmed by tomorrow’s EIA figures, this would be the fourth weekly draw for the energy source in a row. Distillates also experienced an 834,000 barrel draw.

West Texas Intermediate prices fell lower after the release of the new data, in light of the high inventory build-ups. However, the actual supply numbers will be released tomorrow in a report by the federal Energy Information Administration.

In light of the new energy supply configuration, analysts at Goldman Sachs predict that even if the Organization of Petroleum Exporting Countries (OPEC) agree on a production freeze next month, the move will be self-defeating as net energy importer nations begin buying energy supplies en masse to hedge against higher prices.

This week, supplies at the storage facilities at Cushing increased by 417,000 barrels according to the API figures, against a more conservative expected 200,000-barrel build. In the week prior, crude inventories at the site were down by 680,000 barrels according to actual EIA data.

By Zainab Calcuttawala for Oilprice.com

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  • Joe on August 26 2016 said:
    Many of the tanks at Cushing have a million bbls of capacity. If it's news that the volume of oil at Cushing changed by less than half of one tank, I have to shake my head. Sorry.
  • Sooner on August 23 2016 said:
    Gasoline inventories are down because refiners are closed while changing over to winter blends. Crude inventories are up for the same reason. Regardless supply exceeds demand. Drillers gotta pump oil to pay interest on banks. Banks gotta finance drillers or write them off and close the bank. Consumers are dead broke because they never received their $2,500 Obamacare savings check.

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